Energy: Carbon Emissions

Lord Ezra: asked Her Majesty's Government:
	How they propose to reduce carbon emissions from power stations following the European Union climate change agreement on 9 March 2007.

Lord Truscott: My Lords, power station investments are determined by the market and it is the role of government to establish a market framework that ensures that electricity generation is both secure and low carbon. The main market instrument for achieving this is carbon pricing, currently through the EU Emissions Trading Scheme. In the long term, our goal is to reach international agreement and to have a global carbon market. The EU agreement on 9 March on the greenhouse gas target is a major step towards achieving this aspiration.

Lord Ezra: My Lords, I thank the Minister for that Answer. Does he agree that power stations account for 30 per cent of the total UK carbon emissions and that that quantity is growing year by year? Does he further agree, as he has indicated, that steps have already been set out whereby this can be dealt with, including an improved European Emissions Trading Scheme, the encouragement of distributed energy and microgeneration, the further development of renewable energy and the early installation of clean coal plants? In these circumstances and in the light of the climate change agreement, should not the Government now prepare a plan in conjunction with the power station sector and other interested parties to reduce these substantial and growing emissions by a specified rate each year until acceptable levels are reached?

Lord Truscott: My Lords, the noble Lord has a great deal of experience in this area. The whole point of the spring Council was to agree a limit on greenhouse gas emissions growth over coming years—20 per cent unilaterally by 2020 and 30 per cent if we achieve international action. An important part of this is the EU Emissions Trading Scheme. We are currently in phase 2. We see this as the main mechanism for introducing a carbon price in the UK and the EU and for extending it globally. We see it as a major mechanism for reducing carbon emissions. We are looking at other measures. The noble Lord will know about our position on, for example, the co-firing of power stations. We shall also publish our energy White Paper next month, which will outline our plans in detail.

Lord Renton of Mount Harry: My Lords, is it not increasingly clear that for a substantial reduction in carbon emissions from energy production to be obtained we shall have to realise a greater percentage of our power from nuclear energy? When will the Government have the courage to make this decision, tell the country that that is what they are going to do and produce a programme for more nuclear power stations?

Lord Truscott: My Lords, as noble Lords know, the Government produced their Energy Challenge last summer which outlined our belief that nuclear should form part of our future energy mix. That is still the Government's position, subject to consultation. We shall publish our views in the energy White Paper to which I referred earlier. Of course, nuclear would be only part of the Government's programme to tackle climate change and reduce CO2 emissions. Another part of that strategy would be to boost renewable energy, which we think is equally important.

Lord Tanlaw: My Lords, in listing the things that the Government would do to reduce carbon emissions, I did not hear the Minister include daylight saving. Is he not aware that this has been done in the United States and Australia for that very reason? Indeed, it is estimated that up to 0.5 per cent of electricity generation and the subsequent carbon emissions could be saved. Can he give a figure on that, and why was it not included in the list that he read out to the noble Lord, Lord Ezra?

Lord Truscott: My Lords, I congratulate the noble Lord on raising the issue for the third day running. Certainly, he is generating a lot of heat on the issue; whether he is also generating a lot of light remains to be seen.

Lord Berkeley: My Lords—

Lord Teverson: My Lords—

Lord Rooker: My Lords, this side.

Lord Berkeley: My Lords, is not carbon emissions trading doomed for failure while member states on the Continent, particularly those where there is a great deal of coal burning, allocate starter packs of such high values of carbon to the industries concerned that there is absolutely no incentive for them to reduce the amount of carbon that they shove into the atmosphere?

Lord Truscott: My Lords, that is why we toughened up the whole approach to the EU Emissions Trading Scheme between the first phase and the second phase. Under the second phase, the national allocation plans were a lot tougher for member states. As a result, we have seen the price of carbon increase from about half a euro under phase 1, to €17.67 currently. Under phase 3 of the EU ETS, we will see a further strengthening of the price of carbon.

Lord Teverson: My Lords, given that we now have a European energy policy, should not a core part of that policy be that any new coal-fired stations are able to capture carbon in the way in which they are built? Should not that become a simple part of that energy policy?

Lord Truscott: My Lords, the noble Lord makes a valid point. It was one of the decisions of the European Union spring Council that carbon-capture and storage should be expanded across the EU—the EU should develop up to 12 carbon capture and storage plants up to 2015 and plants should be carbon-capture and storage ready by 2020. The noble Lord will know that the Chancellor announced that we are having a competition for a carbon capture and storage plant in the UK.

The Lord Bishop of Liverpool: My Lords, is the Minister aware of the new technology that is being installed in Fiddler's Ferry power station in Cheshire, where ash is being turned into concrete, thereby saving 500,000 tonnes of carbon a year? Will his department monitor the success of that technology and in the light of that success encourage other power stations to follow that example?

Lord Truscott: My Lords, I agree with the right reverend Prelate that that is a very good example of the sort of power plants and schemes that we would like to see developed in the UK, and my department welcomes it and similar plants.

Baroness Wilcox: My Lords, we on these Benches welcome the European Union measures to cut carbon emissions by 20 per cent by 2020. While the Government aspire to meet those obligations, we have some practical plans in place. To meet those obligations, I invite the Minister to support us in setting annual targets for the rate of carbon reduction.

Lord Truscott: My Lords, the Government have already announced that we will be introducing a climate change Bill, which will contain carbon targets over a five-year period. One argument against annual targets is that, as noble Lords may be aware, the weather may change in the course of a year, and energy demand can go up and down. It is easier to balance over longer periods, and it gives more certainty to industry and business. Five-year carbon budgets are a better way to go, but there will be annual reports to Parliament, and the Government will be advised by the carbon committee.

Shipping: Light Dues

Lord Berkeley: asked Her Majesty's Government:
	What proportion of the light dues payable by ships entering United Kingdom ports represents a subsidy to support the maintenance of lights in the Republic of Ireland.

Baroness Crawley: My Lords, under the Merchant Shipping Act 1995, the UK Government have a statutory responsibility to fund the Commissioners of Irish Lights, the general lighthouse authority that provides aids to navigation in both the Republic of Ireland and Northern Ireland. In 2005-06, the general lighthouse fund paid £6.4 million, which is around 10 per cent of its total revenue, towards the provision of aids to navigation in the Republic of Ireland.

Lord Berkeley: My Lords, I am grateful to my noble friend for that Answer, but given the Government's commitment to a competitive shipping industry is it not a bit ironic that 10 per cent of the tax on ships entering UK ports goes to Irish ports? Do the Government believe that the same should apply also to French or German ports? Is it not ironic that, 80 years after independence, we are still subsidising the lights in the beautiful island of Ireland? Some 18 months ago in this House, on 28 November 2005, my noble friend said that the Government were starting "hard-nosed negotiations" to resolve the matter. Is it not more like treading on eggshells? Are not the Irish Government and the Irish ports laughing all the way to the bank?

Baroness Crawley: No, my Lords. My noble friend will know that under the Merchant Shipping Act 1995 the three general lighthouse authorities have responsibility for the provision and maintenance of aids to navigation around the UK and the Republic of Ireland. Yes, I said that we were entering hard-nosed negotiations and I hope that he will be encouraged by the fact that the result of those negotiations was that in February of this year a study was to be set up between the Department of Transport in the Republic of Ireland and our Department for Transport to examine the current funding system and to explore whether there can be a more equitable split in cost sharing between the UK and Ireland.

Lord Geddes: My Lords, I can go further back than the noble Lord, Lord Berkeley. In January 2003, Her Majesty's Government said in response to the Transport Committee's report on ports:
	"We remain committed to renegotiating the current agreement to require the Republic of Ireland to meet the full costs of provision of their aids to navigation. We will continue to work closely with the Foreign and Commonwealth Office and the Irish Government to achieve this objective".
	The noble Baroness now tells us that yet another inquiry was started in February. What has been happening for the past three and a half years?

Baroness Crawley: My Lords, we are in constant touch with our colleagues in the Republic of Ireland on this. It is not a simple matter of black and white, shall we say?

Noble Lords: Oh!

Baroness Crawley: I can wax lyrical on this for a long time, my Lords, but I will not. We have here three ancient and long-established organisations—the lighthouse authorities for the Republic of Ireland, Northern Ireland and the rest of the United Kingdom. They work extremely well together and they have huge cost savings through the efficiency of their work. The way in which they work is the way forward for the safety of seafarers around the waterways of the UK and the Republic of Ireland.

Lord Bradshaw: My Lords, will the noble Baroness reflect on the relationship between her department and the Republic of Ireland? I have received answers from her noble friend Lord Davies of Oldham about our relationship with the Republic with regard to lorries from there that constantly flout the laws on weight and drivers' hours. I am constantly told that we are in touch with the Irish authorities, but nothing happens, the law is not observed and we in this country seem to get the bad end of the stick, whether on shipping or road transport.

Baroness Crawley: My Lords, I was briefed on boats, not lorries, but I say to the noble Lord, Lord Bradshaw, that we expect to have results from the study within the next month—certainly by the end of 2007. It will be in two phases: one will gather information on the expenditure on aids to navigation, and the other will assess the options based on that evidence and make recommendations for the future.

Lord Greenway: My Lords, I declare an interest as an Elder Brother of Trinity House. Does the Minister not agree that the present integrated service run by the three general lighthouse authorities is working extremely well? If anything were to bring that co-operation to an end and the Republic of Ireland had to go its own way, the result would be ship owners paying higher light dues in Ireland to the detriment of Irish ports and, possibly, higher light dues in England, Scotland and Wales, because an extra ship might be needed to cover Northern Ireland.

Baroness Crawley: My Lords, the noble Lord, Lord Greenway, has just outlined a little of the complexity of this issue. He is right. The burden of light dues on shipping has steadily fallen since 1993; it has fallen by 50 per cent. He is right about the efficiency gains of the three general lighthouse authorities. He talked about the Trinity House authority and the other two. The automation of lighthouses and centralised lighthouse monitoring are efficiency gains. A rather dramatic phrase is "the solarisation of all buoys", which I am told is also an efficiency gain, as is the collocation of the CIL's Dublin premises.

Lord Glentoran: My Lords—

Baroness Amos: My Lords, I am afraid that we are at 15 minutes.

Lord Glentoran: My Lords—

Noble Lords: No!

Flooding: Management and Defence

Lord Sheikh: asked Her Majesty's Government:
	How much was spent on flood management and defence in 1997 and 2006; and how much capital was invested in preventive measures in those years.

Lord Rooker: My Lords, in 1996-97, total government spend on flood management in England was £307 million. Last year it was £590 million. The capital sums for the two years were approximately £127 million and £273 million respectively. All these figures include coast protection projects, which often provide significant flood-risk benefits.

Lord Sheikh: My Lords, I am grateful to the Minister for that response. Does he agree that spending on flood defences needs to rise from the current level of £590 million to £750 million a year by 2011, which is an increase of around 10 per cent each year, so that people and businesses can continue to feel secure in the knowledge that the Government have a long-term, planned and sustainable approach to the reduction of flood risk?

Lord Rooker: My Lords, I agree with the noble Lord's general point but I cannot agree with the figure. We are spending more than ever before and some £4 billion has been spent across England in the past 10 years. The later years of which he speaks will be subject to the Comprehensive Spending Review that will be conducted later this year.

Baroness Miller of Chilthorne Domer: My Lords, does the Minister accept the advice given in Sir David King's Foresight review, which is backed up by the Association of British Insurers, the LGA and the board of the Environment Agency, that the funding needs substantially to increase, particularly given the need for adaptation around climate change?

Lord Rooker: My Lords, the noble Baroness is right. One can spend a lot of money on flood defences and preventive measures for an island nation. We have a fairly large programme of works on the coast and inland but I cannot stand here and say that it should be a certain figure. I have given the figures for the past 10 years, which were asked for in the Question. It has been a substantial programme. There have been modifications to the budget but there have been no capital cuts in the budget. I understand that the Association of British Insurers is content with our programme and with our keeping to our commitment to making flood defences a priority.

Lord Dixon-Smith: My Lords, the fact is that improvements in the programme, which I readily acknowledge and am grateful for, do nothing to match the increased damage caused because of enhanced property values, which have risen much more rapidly than the expenditure on flood prevention. I am not suggesting for a minute that the two could be kept equal but there is a very real problem for property owners in areas that are prone to flooding.

Noble Lords: Question!

Lord Dixon-Smith: My Lords, the question is coming immediately. There is a problem because the floods are increasingly the result of freak conditions. Have the Government modified their policy to take account of the change in the weather that is going on increasingly over time?

Lord Rooker: My Lords, the value of properties obviously goes up. I understand that the Association of British Insurers has reported very few instances in which members have declined to make flood insurance available to households. We, the Government, are keeping our commitment to the ABI for our programme. I understand that the ABI is content with that. There is ongoing work with the shoreline management programme and the long-term work of the Environment Agency in planning for Thames safety for 2100. That work will be needed for the protection of London in the latter part of this century; it is certainly safe for the earlier part.

Lord Barnett: My Lords, given the likely tight Comprehensive Spending Review, can my noble friend tell us whether his department would be able to manage with a smaller sum?

Lord Rooker: My Lords, on the evidence in front of me, no.

Lord Stoddart of Swindon: My Lords, local authorities and the British Waterways Board are under constant pressure from builders and developers to allow the development of housing and other buildings on flood plains. Will the Government assure me that they will assist local authorities and the British Waterways Board in resisting such pressure? If they do not, all the flood management measures will amount to nothing.

Lord Rooker: My Lords, the noble Lord is quite right. Planning policy statement 25 on development and flood risk was published in December last year by the Department for Communities and Local Government. It gives strength to local government and planning departments in refusing planning permission where there is a flood risk and improves the surveillance of the Environment Agency, which is able to block some of these projects.

Lord Livsey of Talgarth: My Lords, was the flood defence budget for 2007-08 cut in the review prior to the financial year which has just started?

Lord Rooker: My Lords, no. There was a £15 million cut in 2006-07, which has been more than restored for the Environment Agency in 2007-08, with a budget allocation of £436 million. There was slight dip in 2006-07, none of which affected capital. There was no capital programme cut in flood defences.

World Bank

Lord Avebury: asked Her Majesty's Government:
	Whether they will seek the removal of the managing director of the World Bank following reported attempts to delete references to contraception from the bank's Madagascar country assistance programme.

Baroness Amos: My Lords, no. President Wolfowitz confirmed at the bank's spring meetings that improving reproductive health is absolutely crucial to development and will remain an integral part of the bank's new health strategy. We emphasise the great importance that the United Kingdom attaches to reproductive health, including family planning, and to the bank's support for this in its country assistance strategies. We will continue to press the bank on the critical issue of sexual and reproductive health and rights.

Lord Avebury: My Lords, has the Minister seen reports of the leaked e-mails from the World Bank official alleging that, on the orders of the managing director, Mr Daboub, all references to family planning were deleted from the Madagascar country assistance programme? Has she seen reports in the newspapers that other programmes in the region have been tampered with and that the World Bank's strategic programme, which was presented at a meeting last weekend, has been watered down as regards family planning and contraception?

Baroness Amos: My Lords, we have seen those reports and have been lobbied by a number of our NGOs on this matter. That is precisely why the issue was raised with Mr Daboub himself, not only by the Permanent Secretary of the Department for International Development but also by my colleague Hilary Benn when he attended the spring meetings last weekend. We were assured that sexual and reproductive health remains a key plank in the bank's strategy. We will of course continue to ensure that that remains the case.

Baroness Trumpington: My Lords, the Question specifically mentioned Madagascar. Am I right in thinking that our embassy there is closing, or has closed? If so, who is representing our interests?

Baroness Amos: My Lords, if I remember rightly, Madagascar is now being covered by our high commission in Mauritius with a local office in Madagascar.

Lord Lea of Crondall: My Lords, I congratulate the noble Lord, Lord Avebury, in asking this Question. I speak as chair of the All-Party Group on Madagascar. On a recent delegation, we were very impressed by the Madagascar action plan, which includes the provision that the fertility rate—the number of children per family—is, according to the plan, falling from 5.4 as of 2005 to between three and four in 2012. Given that such reductions are absolutely indispensable to give a country such as Madagascar any chance of meeting the millennium development goals, would my noble friend note that the Madagascar action plan is very welcome and needs all the international support that can be given to it? The signs that the World Bank is not giving full support are very regrettable, and I hope that the Government will reinforce the message that Hilary Benn and others have given to the World Bank.

Baroness Amos: My Lords, the Madagascar country assistance plan was approved by the World Bank board on 3 April. It has two pillars: the first is to promote investment and growth in rural and urban areas and the second is to improve access and quality of services, including health. The plan states that, in relation to health, the strategy will help the Government to make further progress on reducing child and maternal mortality by offering access to reproductive services, reducing child malnutrition, improving the availability of clean water and sanitation services, and so on.

Lord Bilimoria: My Lords, the World Bank and the IMF are institutions that were founded over 50 years ago and were suitable for the landscape in the world at that time. Today there are serious concerns about the appropriateness of the World Bank and the IMF, let alone the president of the World Bank's partner's salary. What are the Government doing to initiate and encourage urgently needed reform of the World Bank and the IMF to make them appropriate for today's world?

Baroness Amos: My Lords, the noble Lord may know that we have been at the forefront in pushing for reform at the World Bank and the IMF. He may wish to look at the speech given by my right honourable friend Hilary Benn on 12 April. He talked about the three major issues that need to frame the World Bank's long-term strategy. He said that it needed to look at its structure, how it helped its members and how it would tackle issues regarding climate change and natural resource depletion.

Baroness Tonge: My Lords, I hope that all noble Lords, and indeed the Minister, have read the report, Return of the Population Growth Factor, by the All-Party Group on Population, Development and Reproductive Health. It states clearly, as the noble Lord, Lord Lea, said, that we shall not achieve millennium development goals unless we meet the family planning need all over the world.

Noble Lords: Question!

Baroness Tonge: My Lords, it is extremely worrying, therefore, that the Minister has not really answered this question. Is she not concerned that people in the World Bank are using religious reasons to cut programmes, just as the American Government have done with UNFPA programmes? It is a very serious matter. What representations on this issue will she make to those people?

Baroness Amos: My Lords, I can represent the facts, which are as follows. In a World Bank statement on 15 April, the managing director who is under discussion this afternoon said that he recognised,
	"that he is the managing director of an institution that implements policies approved by an international board of executive directors, and that his job is to execute those policies, independently of what his personal views on any particular issue may be".
	We raised the issue with the president of the World Bank, and he has assured my right honourable friend the Secretary of State that these issues remain central to the work of the bank. We will continue to monitor that. The noble Baroness should be well aware of this Government's commitment to those issues and to meeting the target on reproductive health by 2015. We have put considerable resources into this issue. I cannot deal with speculation in the newspapers; my job is to deal with the facts as they stand.

Baroness Rawlings: My Lords, Madagascar has so far escaped the worst of the AIDS epidemic in sub-Saharan Africa, but the figures show that sufferers are disproportionately female: there are three times as many young female sufferers as male sufferers. In such a situation, does the Minister agree that contraception and family planning have a vital role to play in combating the disease?

Baroness Amos: Yes, my Lords, I do. I also think that putting gender equality issues at the centre of the development agenda in Madagascar is critical.

International Tribunals (Sierra Leone) Bill [HL]

Baroness Royall of Blaisdon: My Lords, on behalf of my noble friend Lord Triesman, I beg to introduce a Bill to confer power to make provision in relation to the Special Court for Sierra Leone corresponding to that made in relation to the International Criminal Court by Sections 42 to 48 of the International Criminal Court Act 2001. I beg to move that the Bill be now read a first time.
	Moved accordingly, and, on Question, Bill read a first time, and ordered to be printed.

Serious Crime Bill [HL]

Lord Bassam of Brighton: My Lords, on behalf of my noble friend Lady Scotland of Asthal, I beg to move the Motion standing in her name on the Order Paper.
	Moved, that the amendments for the Report stage be marshalled and considered in the following order:
	Clauses 1 to 4,
	Schedule 1,Clauses 5 to 35,Schedule 2,Clauses 36 to 44,Schedule 3,Clauses 45 to 48,Schedule 4,Clauses 49 to 56,Schedule 5,Clauses 57 to 65,Schedule 6,Clause 66 ,Schedules 7 and 8,Clauses 67 to 69,Schedule 9,Clauses 70 and 71,Schedule 10,Clauses 72 to 75,Schedule 11,Clauses 76 to 78,Schedule 12,Clause 79,Schedule 13,Clauses 80 to 82.—(Lord Bassam of Brighton.)

On Question, Motion agreed to.

Justice and Security (Northern Ireland) Bill

Lord Rooker: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, that the amendments for the Report stage be marshalled and considered in the following order:
	Clauses 1 to 8,
	Schedule 1,Clause 9,Schedule 2,Clauses 10 to 23,Schedule 3,Clauses 24 to 37,Schedule 4,Clauses 38 to 42,Schedule 5,Clauses 43 to 46,Schedule 6,Clauses 47 and 48,Schedule 7,Clauses 49 to 52. —(Lord Rooker.)

On Question, Motion agreed to.

Greater London Authority Bill

Baroness Morgan of Drefelin: My Lords, on behalf of my noble friend Lady Andrews, I beg to move the Motion standing in her name on the Order Paper.
	Moved, that it be an instruction to the Grand Committee to which the Greater London Authority Bill has been committed that they consider the Bill in the following order:
	Clauses 1 to 4,
	Schedule 1,Clauses 5 to 54,Schedule 2,Clauses 55 and 56. —(Baroness Morgan of Drefelin.)

On Question, Motion agreed to.

Corruption Bill [HL]

Baroness Williams of Crosby: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, on behalf of my noble friend Lord Chidgey, I beg to move that the order of commitment be discharged.

Moved accordingly, and, on Question, Motion agreed to.

Legal Services Bill [HL]

Baroness Ashton of Upholland: My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to move that the Bill be now further considered on Report.

Moved accordingly, and, on Question, Motion agreed to.
	Clause 7 [Supplementary powers]:

Lord Campbell of Alloway: moved Amendment No. 39:
	Clause 7, leave out Clause 7

Lord Campbell of Alloway: My Lords, I am reported as having moved this amendment at the end of the first day on Report, but I did not do so. For clarification, I would like to put the record straight. It is reported at col. 109 that the noble Baroness, Lady Ashton, moved one of my amendments, on judicial review, but she did not. It was reported that the amendment that she moved, which was my amendment, was approved. It was not. It is important that I should clarify the situation. I opened on the judicial review amendment and not on the amendment to leave out Clause 7.
	It was getting late and I am not sure what happened, but the Minister spoke to both amendments. I am very glad that she did, because it will save a lot of time today. I accept much of what she said. What she said on the judicial review amendment, which I totally accept, was that she had taken good legal advice and that there was a risk of,
	"inadvertently narrowing the court's discretion".
	The problem was with the inclusion of the word "administrative" in relation to decisions. If the noble Baroness is prepared at Third Reading to move the amendment without the word "administrative", I will be delighted. If she does not wish to do so, I shall do so myself.
	The noble Baroness said that Clause 7 was,
	"an important clause that allows the board to carry out functions that are in effect ancillary to the conduct of its principal regulatory functions",
	and that leaving it out,
	"could reduce the board's ability to discharge its duties".
	Then she said:
	"It is a standard provision".—[Official Report, 16/4/07; col. 110.]
	In view of what she said, I should be content to propose at Third Reading merely to add a qualification to Clause 7. As drafted, it states:
	"The Board may do anything calculated to facilitate, or incidental or conductive to, the carrying out of any of its functions".
	I would add the qualification, "which are in effect ancillary to the performance of its principal regulatory functions". That disposes of that.
	I have one last point. It is said that the clause is in standard form. However, it is far too widely drafted. If it has been picked out of the pigeonhole of the draftsman's formal amendments, it should not be carried into this Bill without qualification. I beg to move.

Baroness Hayman: My Lords, it might assist the House if I report that I understand that, in relation to the amendments to which the noble Lord referred at the beginning of his speech, Hansard incorrectly reported that Amendment No. 38 had been agreed to. In fact, Amendment No. 39 was not moved and a correction to that effect appeared yesterday. I hope that that is helpful.

Baroness Ashton of Upholland: My Lords, I am very grateful to the noble Baroness the Lord Speaker for indicating the correction that has been made in Hansard. The noble Lord, having moved Amendment No. 38, withdrew it. On the issue of judicial review, as the noble Lord will remember from Monday, he was keen to look at my words to consider carefully whether I had done enough in his view to deal with the matter by indicating that of course judicial review would be available, as it would be with other public bodies of this kind. He is of course at liberty to then decide what he wishes to do.
	The noble Lord is also correct to say that the amendment to leave out Clause 7, Amendment No. 39, was grouped with Amendment No. 38, and I indeed replied to it. As he rightly says, it was late in the evening. I am afraid that I assumed that, in speaking to Amendment No. 38, he wished me to respond to both Amendments Nos. 38 and 39, as he did not degroup the amendment but left it where it was.
	Clause 7 is essential. As I said, it is a "standard" clause—that is the word that I used. I cited a number of instances where it appears and I hope that the noble Lord will accept that it in no way enables the board to act beyond the parameters of its powers but, rather, gives it within those powers the flexibility that it will need to decide on things such as information technology and staffing. For the benefit of today's debate, I hope that the noble Lord will be able to withdraw his amendment and to reflect on the matter further.

Lord Campbell of Alloway: My Lords, I am very much obliged to the noble Baroness. Of course I will withdraw the amendment, but I do not accept that the clause can stand without qualification, as I suggested, taking the words from the speech of the noble Baroness. I merely say that to avoid misunderstanding. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 8 [The Consumer Panel]:

Lord Hunt of Wirral: moved Amendment No. 40:
	Clause 8, page 4, line 7, at end insert ", and
	(c) qualified but non-practising solicitors who, in their professional capacity, use or purchase services provided by persons who are authorised persons in relation to activities which are reserved legal activities."

Lord Hunt of Wirral: My Lords, Clause 8 establishes the Consumer Panel. It is vital that on the Consumer Panel, to be established and maintained by the Legal Services Board, there should be a fair degree of representation. Paragraphs (a) and (b) of subsection (4) mention a number of interests and persons. Amendments Nos. 40 and 41 are intended to ensure that representatives of corporate consumers are included on the Consumer Panel. I move Amendment No. 40—I am very grateful to my noble friends Lord Campbell of Alloway and Lord Kingsland for their support—to ensure that regulation is targeted at the specific needs of different situations, rather than operated through a "one size fits all" approach. The regulatory arrangements in respect of the provision of services to lay persons and small businesses may well differ substantially and fundamentally from those that are appropriate for corporate consumers of legal services, where there is less likely to be an inequality of knowledge between the client and the lawyer.
	To achieve its aim, the amendment would guarantee that the Consumer Panel included the full range of consumers of legal services. The prohibition elsewhere in the Bill on any authorised person being a member of the Consumer Panel would undermine efforts to ensure that corporate consumers are represented. In practice, the vast majority of corporate users of legal services instruct law firms through their in-house legal departments. The expertise and knowledge of what corporate consumers require from the law firms that they instruct rests primarily with those in-house legal teams. We in the Joint Select Committee heard evidence from sizeable sections of those in-house legal departments. One lawyer who spoke to us was in charge of an in-house legal team of 500 lawyers, who regularly purchased legal services from outside law firms.
	It is therefore desirable to ensure that the prohibition on authorised persons serving as members of the Consumer Panel is not applied to representatives of corporate consumers. The amendments, particularly Amendment No. 40, are designed to bring that about. I thank the City of London Law Society for the representations that it has made. I particularly thank the group legal director of Emap, Nick Folland, who came to see me with the City of London Law Society and explained this in much greater detail. I hope that the Minister will agree to the amendment.

Lord Clinton-Davis: My Lords, I want to clarify the phrase "non-practising solicitor". Does the solicitor concerned hold a practising certificate? That is vital, but there is no mention of it here. In other words, should the holding of a practising certificate be the criterion?

Lord Hunt of Wirral: My Lords, I am very grateful to the noble Lord for having given me notice of his question. I have particularly in mind people who have qualified as lawyers but, say, have pursued a more corporate career and have become a company secretary or some equivalent. That company secretary will often also head up the in-house legal department. In many ways, I am trying to tempt the Minister to see that the amendments do not seek to create a huge opening in the requirements that she has laid down, but instead deal with people who are qualified but non-practising solicitors; that is, they do not hold themselves out to act on behalf of clients. Often they will not have a practising certificate, as such, but they consume legal services. Under the Bill, they would be barred from serving on the Consumer Panel. I beg to move.

Lord Clinton-Davis: My Lords, all I am asking is that the noble Lord considers my point further. It may be possible to rebut it, but I think that it is relevant, so will he consider it again?

Lord Hunt of Wirral: Yes, of course, my Lords.

Lord Evans of Temple Guiting: My Lords, my noble friend should really save his remarks for a speech rather than intervening on Report in the way in which he has.

Lord Carlile of Berriew: My Lords, we on these Benches broadly support the amendment that the noble Lord, Lord Hunt of Wirral, has moved so eloquently. On the point made by the noble Lord, Lord Clinton-Davis, which is plainly important, will the Minister confirm in her reply that nothing in the clause excludes the appointment to the Consumer Panel of a qualified lawyer who does not hold a practising certificate? My understanding of the clause is that the many lawyers who no longer hold practising certificates may be on the panel. Indeed, those of us who have served as chairmen or members of various tribunals and panels around the country at various times know the immense value that that cohort of people, who are often volunteers, give to the decision-making process at various levels.
	Secondly, we have heard from the Minister and ministerial colleagues during the debates on this Bill that it is for the board to make decisions, wherever possible, on how its functions are carried out. Surely it is right for the board that selects members of consumer panels to be able to make decisions on whether non-practising lawyers who hold practising certificates should be members of the Consumer Panel. I understand the direct answer to the question asked by the noble Lord, Lord Clinton-Davis, to be, "Yes, this is intended to cover people who hold practising certificates as solicitors, albeit not in fact practising themselves".
	A large body of business does huge amounts of what one might loosely call block litigation—for example, in relation to debt collecting on a very large scale for credit card companies or councils that have not received payments of council tax. The lawyers who manage that kind of work are non-practising, but they are about as large consumers of legal services as one can imagine. I would suggest, in common with the noble Lord, Lord Hunt of Wirral, that that group ought to be regarded as important consumers. In that context, would it not be right for the board, when it sets criteria and decides who should be appointed to the Consumer Panel, to be able, although not obliged, to select applicants from that cohort to become members of the panel?

Lord Campbell of Alloway: My Lords, my name is on this amendment. I shall be very short. I declare an interest as a qualified but non-practising member of the Bar. I hope that, having listened to the reasons given in support of this amendment, your Lordships will accept that the amendment is appropriate, indeed requisite, as a matter of practical reality.

Lord Kingsland: My Lords, I rise simply in response to a matter raised by the noble Lord, Lord Carlile of Berriew, when he referred to certain categories of non-practising lawyers as being important consumers of legal services. Throughout the debates on this Bill, the Government have talked about the importance of consumer interests, which no one would deny are very important. But we have not gone as far as looking at the composition of that consumer interest.
	I have been told—I do not know whether it is true—that around 40 per cent of consumers of legal services are either government or local government agencies, or other public authorities that are indirectly related to government agencies. That may or may not be true, but it would be extremely interesting for your Lordships' House if the Government were to do an analysis of the nature of the consumers of legal services. Often the Government refer to consumer interest; but it must be equally true that sometimes one consumer's interest is not the same as another's. Indeed, there may be occasions when consumer interests conflict.

Baroness Ashton of Upholland: My Lords, I am extremely grateful for this interesting debate. I agree with a large amount of what has been said, but there is a problem with these amendments because they technically do not work. It is very interesting to think about what we mean by the consumer in this context. I do not know whether the figure of 40 per cent is correct. It would not surprise me. If we have any statistics on that, I shall try to dig them out today and circulate them around your Lordships' House.
	In Committee, we talked a lot about the rationale for setting up the Consumer Panel in the Bill and the opportunity to bring consumers together in order to have that input in a very particular way. There were issues, but I am sure that noble Lords were broadly content with what we are seeking to do. Consumers encompass a wide range of different people. Individuals and small businesses consume legal services, as indeed do government departments, big business, voluntary organisations and others. Under the clause, the Consumer Panel is designed to represent those interests and, indeed, is required to think about its representation.
	I accept the point made by the noble Lords, Lord Carlile and Lord Kingsland, that we should think about the role of the board, but we want to make it clear in legislation who we want to ensure is included. It is also true that non-practising but legally qualified professionals could serve on the panel. Where we differ slightly is on the important issue of who should sit as a representative of that corporate body. The noble Lord, Lord Hunt of Wirral, answered that by saying that, through their legal departments, many large corporate bodies instruct outside legal professionals, and I maintain that the consumer in that context is the person asking the legal department to instruct the external legal professionals. Just as I, as a Minister, have legal advisers who will instruct parliamentary counsel or indeed external legal professionals to support and advise me, so, too, noble Lords who are not themselves legally qualified in particular areas will instruct as individuals. We are seeking to ensure that the consumers on this panel are not those practising in the legal profession, wonderful though they may be.

Lord Carlile of Berriew: My Lords, I apologise for interrupting the noble Baroness, but I wonder whether she would reflect on what she has just said. The voluntary sector, particularly citizens advice bureaux, already instructs lawyers and will remain in a position to do so, perhaps increasingly so, but its representatives will not be excluded from being on the Consumer Panel. There is an inequality between those who happen to be qualified and hold practising certificates and who instruct lawyers formally, and voluntary organisations doing exactly the same. It does not bear logical analysis.

Baroness Ashton of Upholland: My Lords, I take the noble Lord's point, but let me try again. The point that I am making is that this is a Consumer Panel that, under the terms of the Bill, does not have on it people who are qualified practising lawyers. Those who are not practising but might be legally qualified will, in our view, be appropriate to sit on the panel, because they would be representing their corporate body or organisation in a different way. That is the fundamental principle behind what we are seeking to do with the Consumer Panel. We want a range of people who, as the noble Lord, Lord Hunt of Wirral, was absolutely right to say, are representative of the different kinds of organisations and individuals who consume legal services, but we want to look specifically for people who are not themselves practising legal professionals. They may be qualified, but they will be acting as a corporate consumer, a small business consumer or an individual consumer in this context. It is an important point, but it does not take away from ensuring that a range of voices is heard on the Consumer Panel. This is deliberately designed to be about the role of the consumer, not the consumer as a lawyer talking about legal services.

Lord Hunt of Wirral: My Lords, I am grateful to the Minister for giving way. Just to clarify the point, is she saying that the person within a large corporate consumer of legal services who asks the company secretary or the in-house legal department to instruct an outside firm could well sit on the Consumer Panel? Would it be the individual running that part of the business? Is the noble Baroness saying that that person could represent adequately the views of the huge area of corporate consumers of legal services?

Baroness Ashton of Upholland: My Lords, if the person is not a practising lawyer—they may be legally qualified but not practising—that is what I am saying. To return to the original point made by the noble Lord, within the Consumer Panel it is important that the breadth of consumer interests is represented. The question is how one best achieves that. We would argue that it is best achieved by taking people from large and small organisations, and perhaps individuals, who are consumers but not practising lawyers—they may be legally qualified, but not practising. How a business chooses to do that is up to the business itself. For example, one would ask a large business in the retail sector to consider who best would represent it. What we would not be looking for is the practising head of that business's legal department. It might choose an individual who is legally qualified but not practising. That is all there is between us here.

Lord Campbell of Alloway: My Lords, before the Minister sits down, I have a question about procedure. Does she know why any objection was made to the noble Lord, Lord Clinton-Davis, asking my noble friend a relevant question?

Baroness Ashton of Upholland: My Lords, the only concern on the government Benches is that we are on Report. We have had six full days in Committee, which were extremely interesting. There are practices, which noble Lords developed long before I came to your Lordships' House, to enable us to engage with the business on Report and complete it satisfactorily. There are 24 groups for this evening, and another for the third day; I would like to be able to consider them all. Some of the debates we have had before—although, I agree, not this one—and we are trying in our own way to ensure that noble Lords have the time to consider what I know are the important issues ahead.

Lord Hunt of Wirral: My Lords, the most important point that the Minister has just made is that she has no criticism at all of her noble friend Lord Clinton-Davis, and I thank him for making a very important point. I have looked through the Companion and cannot see any prohibition. Although we are on Report and we should not have too much toing and froing, the noble Lord had an important point to make, and I am grateful to him for making it. I am also grateful to the Minister for clarifying exactly where we stand on this. We have tried a few times to get it right. I must go back and see whether we can find a way through this, and perhaps return to it at Third Reading. I am grateful to my noble friends for their support. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 41 and 42 not moved.]

Lord Kingsland: moved Amendment No. 43:
	After Clause 11, insert the following new Clause—
	"Representations by approved regulators and other representatives of practitioners
	The Board must make and maintain effective arrangements for consulting practitioners on—
	(a) the extent to which its general policies and practices are consistent with its duty under section 3; and (b) any policy statements on which it proposes to issue under section 48."

Lord Kingsland: My Lords, I shall also speak to Amendments Nos. 44 and 45. The amendments would require the Legal Services Board, in addition to the existing requirement on it to consult the Consumer Panel, to consult appropriately with approved regulators and representatives of the regulated sector.
	The Bill already provides for the Legal Services Board to establish a Consumer Panel and to consult it extensively but it does not contain equivalent arrangements for consulting representatives of the regulated sector. In Committee the Minister resisted the suggestion that a practitioner panel should be established alongside the Consumer Panel. She argued that such a panel was unnecessary, given that, unlike in the financial services sector, where a practitioner panel has been established, there are already well established representative bodies for the legal profession. We accepted her approach. It is surprising, therefore, that the Government have not brought forward an amendment concerning consultation with the regulated sector. In Committee the Minister made it clear that, while the Government were opposed to the creation of a practitioner panel, on the grounds that there were already effective arrangements for representation, she accepted in principle my amendment, which would have required the Legal Services Board to give the same consideration to representations from approved regulators as it gave to those from the Consumer Panel. I refer her to col. 937 of Hansard of 22 January.
	The noble Baroness said at col. 942 that she would come back to the issue on Report. She repeated her support for this in later discussions in Committee. On 21 February, in discussing an amendment concerning the "polluter pays" principle in the Office for Legal Complaints, she said:
	"I remind noble Lords that we have already accepted Amendment No. 38 in the name of the noble Lord, Lord Kingsland, which required that Clause 10 will apply mutatis mutandis to representations by proposed regulators, whether in the regulatory or representative capacities. That consultation will have more force as a consequence of my acceptance of that principle".—[Official Report, 21/2/07; col. 1117.]
	The noble Baroness repeated the point on the last day of Committee when discussing an amendment to require the board to consult on the extent to which its policies are consistent with its duty under Clause 3 to act in accordance with best regulatory practice. She said:
	"In accepting Amendment No. 38, we have accepted in principle that this requirement—
	to consult—
	"should apply also to representations from the approved regulators".—[Official Report, 6/3/07; col. 149.]
	I recognise that the Bill already requires the Legal Services Board to consult before exercising a number of specific functions. For example, Clause 49 requires the board to consult before issuing policy statements. Clause 52 requires some consultation before the board exercises its powers in relation to regulatory conflict. Clauses 30 to 36, which provide powers about setting performance targets, making directions, issuing public censures and imposing financial penalties, require the board to consult the approved regulator concerned before exercising those powers. But there is no overall requirement to consult on the board's overall approach to the discharge of its functions and, in particular, on whether the scale and scope of its proposed activities are appropriate and proportionate.
	These amendments would fill that gap. The general duty to consult suggested in Amendment No. 43 would require the board to consult about its general policies and practices. That is supplemented by the duty in Amendment No. 44 to establish effective arrangements for consultation with approved regulators and other representatives of authorised persons. I beg to move.

Lord Hunt of Wirral: My Lords, the Minister certainly has a case to answer. My noble friend has set out the background very well. It was my amendment in Committee to establish a practitioner panel. I listened carefully to the Minister and, in view of what she said, decided to dispense with the amendment and not seek to bring it before the House again; but that was on the basis that I had been comforted by her assurances, set out so clearly by my noble friend. I look forward to hearing why we do not have a government amendment and exactly how the noble Baroness intends to proceed.

Lord Whitty: My Lords, I oppose the cumulative effect of the amendments but not because I do not think that the views of front-line regulators have to be taken into account and that consultation should be protected for them, but because Amendment No. 45 refers to treating front-line regulators in the representative as well as the regulatory capacity in the same way that Clause 10 covers the Consumer Panel.
	The procedures in Clause 10 are there for the Consumer Panel because there is an asymmetry of information and expertise, which needs to be taken into consideration in the Bill so that consumers have some right of representation. Were we to give the same representation rights to the Law Society and the Bar Council, for example, they would have the right to object to any decision of the board and would have the same degree of attention that the Consumer Panel is given in order to redress the imbalance in the normal relationship between the legal services and consumers. I do not fundamentally object to those bodies having a consultative relationship, but I object to the view that they should have the same protection that Clause 10 gives the Consumer Panel. That would unbalance what Clause 10 is intended to provide for the Consumer Panel.

Lord Campbell of Alloway: My Lords, the noble Lord, Lord Whitty, returns to the question of intervention, on which there have been many discussions. Amendments Nos. 43 and 44 are wholly consistent with Sir David Clementi's original recommendations and the Government's earlier proposed intention to ensure that the LSB powers of intervention were exercised only in cases where there is a serious impact on regulatory objectives taken as a whole, rather than a merely adverse impact on one or more of those objectives. Consultation, as proposed by these amendments, is an essential means to implement the powers of intervention in a manner originally intended by the Government to maintain the supervisory role and an effective, efficient front-line regulation by the approved bodies.
	Your Lordships may think that this matter of principle, to which we return again and again, ought to be recognised as such in the Bill. One might group together certain clauses, such as Clauses 3 to 5 and 40 to 43, for such an exercise. On doing that, one has to distinguish between this statement of principle, which applies only to the LSB and would serve, if expressed, as an amendment to Clause 3, and Amendment No. 5, however redrafted, which would be of generic application to all regulatory bodies and continue to serve as an amendment to Clause 1. I am grateful for the opportunity to contribute.

Lord Carlile of Berriew: My Lords, I will make a very brief intervention about a question of confidence between the Legal Services Board and the profession. The Bar Council, for example, or individual barristers can make whatever representations they like to the Legal Services Board and the Consumer Panel. I have no doubt that such representations will be taken into account, but I am sure that the Bar Council, the Law Society and other representative bodies will want to work in partnership with the Legal Services Board. In doing so, they will want to take their members with them. They need to persuade their members that they are taking them with them. A requirement to consult would give practitioners, particularly in the larger parts of the legal profession, confidence that the Legal Services Board will really listen to representations. I do not myself believe that the amendments would make any real difference to the process that will be carried out but they might make a very significant difference to the level of confidence that exists between, for example, the Bar—my own profession—and the Legal Services Board.

Baroness Carnegy of Lour: My Lords, another voice from a non-lawyer might not be inappropriate. I listened carefully to what the noble Lord, Lord Whitty, said, and I see his point. The idea of the panel is to ensure that consumers have a proper voice. To have a provision in the Bill that counteracts that strongly is not a good plan. What the noble Lord, Lord Carlile, has just said is also important. The least that lawyers can expect is to be able under the Bill to make representations of a kind mentioned in these amendments, but that must not in any way act against the provision of the panel. I cannot follow the legal theology of all this, but it seems common sense that lawyers must know that they can make representations, because that is very important to the profession, which has regulated itself up to now—in my view, very adequately.
	The Government should pay attention to this, but I have no idea whether these amendments are the right approach.

Baroness Ashton of Upholland: My Lords, I am grateful to noble Lords. The noble Lord, Lord Carlile, and the noble Baroness, Lady Carnegy of Lour, are absolutely right to raise the issue of confidence. I seek to ensure in the legislation that the level of confidence among consumers, the public and the legal profession is at the right level.
	The noble Lord, Lord Kingsland, who read out my words, is completely right. I agreed that I would take away the principle of mutatis mutandis—which I did not understood until noble Lords explained it to me. I was only making a vague joke when I said that I did not understand it because my Latin was too rusty. I said that we would ensure that we had equality of provision of opportunity for consultation in the legislation. I stand by that. I took the amendment away—

Lord Kingsland: My Lords, if I may respectfully suggest to the Minister, she went further than that. She said in terms, on two occasions, that she accepted the amendment.

Baroness Ashton of Upholland: My Lords, the amendment was about mutatis mutandis. I think that I was very clear to noble Lords that I sought to ensure that whatever I brought forward in the Bill—

Lord Kingsland: No.

Baroness Ashton of Upholland: My Lords, if the noble Lord disagrees, he can divide the House; that is fine. It is up to him. I want to be clear about what I understood that I did, and the noble Lord can perfectly legitimately challenge that. I accepted the principle of the amendment; I did not accept the wording, or I would have accepted it on the Floor of the House.
	I said that there was an issue about enabling the professions to talk to and be consulted by the Legal Services Board on a level with that of the Consumer Panel. My noble friend Lord Whitty indicated, and noble Lords are in broad agreement, that there is an understanding that we need to set up the Consumer Panel to enable it to be formally consulted because it exists in a different way and will come into being only by being brought together by the Legal Services Board with the current regulators.
	I absolutely agree that I took the amendment away. I talked with my ministerial colleagues and took advice on it; we talked to a variety of people, and my honourable friend Bridget Prentice, the Minister responsible for the policy, looked at the issue very carefully. The advice that I got back was that the Bill provides a variety of means whereby consultation is available, both specifically as the noble Lord, Lord Kingsland indicated—

Lord Campbell of Alloway: My Lords, I have only one quick question: what is the objection to this amendment? What goes on with colleagues is one thing, but what is the objection to this amendment in the way in which it is put before the House today?

Baroness Ashton of Upholland: My Lords, one of the disadvantages of the noble Lord interrupting is that I cannot complete my speech. If he will wait until I have finished he may well need to ask me that question if he feels that I have not explained the matter properly. I was trying to explain the process that I had gone through and to give reasons. The noble Lord may disagree with them and feel that I have not explained them properly; that is completely reasonable, but at this stage in our proceedings I cannot always necessarily answer questions with the speed and brevity that he would like because other noble Lords need to hear the rationale.
	I accept the principle that there should be equality of representation on behalf of consumers and professionals, but I do not accept that the amendments before us achieve that. We need to have a Consumer Panel for the reasons that I have given, but giving general rights to approved regulators to have their representations heard in addition to their rights to make representations on the large number of provisions in the Bill and their ability to set out regulatory arrangements that are in the interests of authorised persons would unbalance the system again. As I say, noble Lords can disagree with my conclusions. I accept the principle of making sure that we have equality and consultation. When I looked at how to produce an amendment that might achieve that, I was strongly advised that we had already achieved it. Therefore, I did not table any further amendments. Noble Lords may agree or disagree with that but I did it in good faith.
	We have well established, well organised and possibly well funded bodies that represent the interests of authorised persons. They will be unshackled from their regulatory responsibilities so that their representative arms can lobby the board more effectively and freely than they do at present. The board will want to ensure that it takes on board all sides of the argument before coming to a decision or taking action; indeed, it is in its interests to do so as it can be judicially reviewed if it comes to an unreasonable conclusion.
	If the board fails to consult a body that could be directly affected by its action, that would be inconsistent with the principles of best regulatory practice which Clause 3 requires the board to have regard to. The board must listen to and consult the bodies under good regulatory practice. It also knows that it can be judicially reviewed if its decisions are arrived at unreasonably.
	In addition, throughout the Bill there are specific ways in which the board must consult. Added together and weighed against the formation of a Consumer Panel, it is our view that we have achieved what your Lordships desired and the principle, which I completely accept, of equality of representation. Although the noble Lord, Lord Kingsland, may feel that I have not fulfilled my obligations, I took away the principle in good faith and believe that we have achieved it. Noble Lords will reach their own decisions on that accordingly.

Lord Kingsland: My Lords, as always, I am most grateful to the noble Baroness for her response. However, she will have heard from my noble friend Lord Hunt that he decided not to retable his amendment establishing a practitioner panel precisely because of the clear statements that he believed she made on Amendment No. 38 and its effect on Clause 10.
	In my submission the noble Baroness gave an undertaking in Committee that she accepted, in terms, Amendment No. 38 and went on to explain exactly what impact it had on Clause 10. I shall not press the matter further today except to say that, in the light of this debate, I am sure she will now look again at what she said. I submit to the noble Baroness that if she were not to come back at Third Reading with an amendment that accepted what was Amendment No. 38 in Committee, that would be an extremely serious matter for your Lordships' House. I do not want her to be in any doubt about that.
	The noble Baroness raised one other matter in responding, which was almost a lament and which we have heard from her before—that policy decisions are not taken in this House but by a Minister in another place. I could understand that as being an explanation for many of the dilemmas in which she has found herself had this Bill started in another place. But the Bill started in your Lordships' House; and although the Minister to whom the noble Baroness referred is a Minister in the Department for Constitutional Affairs, she is a Parliamentary Under-Secretary. The person in charge of the Bill is the noble and learned Lord the Lord Chancellor, who is a Member of this House. So, with great respect, it cannot be true to say that the policy with respect to this Bill is made in another place. The policy is in your Lordships' House; and the person who is ultimately responsible for it is the noble and learned Lord the Lord Chancellor. I understand the dilemma of the noble Baroness; but I do not accept the consequences of her argument.

Baroness Ashton of Upholland: My Lords, let me be clear. I accept full responsibility for my role in relation to this Bill. When this Bill is in your Lordships' House—whether it begins here or comes here after another place—and while I am responsible for it, I take responsibility for the policy. My references to my honourable friend are to make sure that noble Lords know that I consulted the person who is responsible for developing the policy; otherwise noble Lords might feel that I had made an arbitrary decision without consulting my colleagues. I refer noble Lords to the Tribunals, Courts and Enforcement Bill, for which I hold policy responsibility. Members of another place may refer to that fact during the passage of the Bill through that House. In a sense, it is a sign of respect and recognition of that role. That is what I seek to do. Of course, my noble and learned friend, whom I have consulted on all these issues, takes absolute and overall responsibility for the Bill, but I take responsibility for my commitments, my words and the work that I do.

Lord Kingsland: My Lords, I am most grateful to the noble Baroness, and by saying what she said about the noble and learned Lord the Lord Chancellor she teased the point out for me. While I am grateful to the noble Baroness, at the same time I would not like her to be in any doubt about the seriousness with which we regard this matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 44 and 45 not moved.]
	Clause 12 [Meaning of "reserved legal activity" and "legal activity" ]:

Lord Hunt of Wirral: moved Amendment No. 46:
	Clause 12 , page 5, line 28, at end insert—
	"( ) will-writing for fee, gain or reward;"

Lord Hunt of Wirral: My Lords, I do not want to rehearse the arguments that we heard in Committee, or the recommendation of the Joint Committee in its report at paragraph 216 on page 65, but I want to raise an issue again in moving Amendment No. 46, in the light of the submission that I have just received from the Institute of Professional Willwriters. Apparently, the institute was formed in 1991 to set voluntary standards in the unregulated will writing market. On page 79 of the White Paper, the noble and learned Lord the Lord Chancellor made a very specific pledge:
	"The Government will continue to work closely with consumer bodies, the providers of will writing services and bodies that represent them to help raise quality, standards and consumer awareness".
	I was therefore very surprised indeed to hear from the Institute of Professional Willwriters that it had submitted a detailed report to the Department for Constitutional Affairs in September 2005 outlining in detail its belief that,
	"a voluntary regulatory regime is unlikely to be effective in dealing with the issues that face the will writing profession".
	Despite the words of the noble and learned Lord, that organisation has advised me that there has been no consultation at all with the DCA since September 2005. In fact, the institute has received no contact from the noble and learned Lord's department since a meeting in July in 2005 that ended with a commitment on the part of the department that a further meeting would be scheduled for later in 2005. The institute has asked me how that is "working closely" with the people who represent professional will writers. In the light of that, although I know that the noble Baroness gave me a convincing response on the issue, I am sure that she cannot have been aware that that commitment by the noble and learned Lord in the White Paper to work closely with this body had been disregarded by the department in the way that I have described. I felt that I had to raise the issue again. I beg to move.

Viscount Bledisloe: My Lords, I confess that I am amazed by the provision that seeks to exclude wills from the provisions of the Bill. Schedule 2(5), part of which the noble Lord's Amendment No. 48 seeks to leave out, states that:
	"'Reserved instrument activities' means ... preparing any instrument of transfer or charge for the purposes of the Land Registration Act ... or preparing any other instrument relating to real or personal estate for the purposes of the law of England and Wales".
	Sub-paragraph (3) states that "instrument" includes any contract for the disposition of land,
	"except a contract to grant a short lease".
	So, reserved activities are covered if I want to let a house or some land other than on a short lease, or if I want to give away a bit of my real estate to someone during my lifetime. However, for some extraordinary reason, on my death, when I dispose of all I own and set up some trusts, or something for that purpose, that is not covered. I do not understand how a small transaction inter vivos is caught, but this total disposal of my property on my death is excluded, can be done by anyone and is not an activity governed by the Bill. I look forward to some enlightenment.

Lord Evans of Temple Guiting: My Lords, there has been full discussion on this matter at previous stages of the Bill and the question as to whether will writing should become a reserved legal activity has, as my noble friend has said before, been under consideration for some time—most recently since the announcement in March 2005 by my noble and learned friend the Lord Chancellor and Secretary of State that his department would consider the case for the regulation of will-writing and estate administration services.
	If I may, I will read out the next paragraph of my speaking note and then return to the point made by the noble Lord, Lord Hunt. Since that time we have worked closely with consumer bodies, the legal profession, those outside that profession who currently provide will-writing services, and the Office of Fair Trading, and have asked them to provide us with any evidence that might suggest that there is a systemic failure in the current will-writing market and that consumers are being put at risk as a result. The DCA has met the Institute of Professional Willwriters, the Office of Fair Trading and others to discuss voluntary jurisdiction. The DCA has asked the institute to provide the OFT with a draft set of rules for consideration under the code. Our view is that if there is any evidence of systemic failure, the LSB may make a recommendation to the Lord Chancellor under Clause 23 for will-writing services to be added to the list of reserved legal services.
	We acknowledge that there may be a problem. We want evidence, which has not been forthcoming, although one or two points have been made at earlier stages of this Bill. But we are not set against this; we just wish it to be discussed. As I have said, we need evidence that there is a problem that needs to be solved.

Lord Hunt of Wirral: My Lords, I am grateful to the noble Viscount, Lord Bledisloe, for his compelling and persuasive intervention. I am slightly confused by the Minister's reply because the chairman of the Institute of Professional Willwriters, Mr Paul Sharpe, contacted me on Monday to say that the institute had submitted a report—and he has sent me a copy of the report—demonstrating that voluntary regulation is not working and containing some of the points that I raised at the Committee stage. He said that there has been no further contact with the DCA since July 2005, following which it submitted the report in September 2005. As I understand it from the Minister, he is under the impression that there has been continuing contact. The only way forward here is to get an assurance from the Minister that a further meeting will take place so that we can at least regularise this position. I see that the noble Lord and the noble Baroness are nodding and, as far as I am concerned, if there is to be a further—

Lord Evans of Temple Guiting: My Lords, the institute has been in regular e-mail correspondence with the department. The department has not seen the report that the noble Lord, Lord Hunt, has in his hand. I think that the way through this is for there to be meetings between now and the next stage of the Bill so that we can sort this out. I do not think that there is any real disagreement here; there is obviously a procedural problem that needs to be sorted.

Lord Hunt of Wirral: My Lords, in response to the noble Lord's points, I beg leave to withdrawn the amendment.

Amendment, by leave, withdrawn.
	Schedule 2 [The reserved legal activities]:

Baroness Ashton of Upholland: moved Amendment No. 47:
	Schedule 2 , page 119, line 6, leave out "paragraph (a) or" and insert "paragraph (a) to"
	On Question, amendment agreed to.
	[Amendment No. 48 not moved.]
	Clause 13 [Entitlement to carry on a reserved legal activity]:

Baroness Ashton of Upholland: moved Amendment No. 49:
	Clause 13 , page 6, line 21, at end insert—
	"( ) Nothing in this section or section 22 affects section 84 of the Immigration and Asylum Act 1999 (c. 33) (which prohibits the provision of immigration advice and immigration services except by certain persons)."
	On Question, amendment agreed to.
	Clause 15 [Carrying on of a reserved legal activity: employers and employees etc]:

Lord Evans of Temple Guiting: moved Amendment No. 50:
	Clause 15 , page 7, line 8, leave out "body or other person ("B")" and insert "person ("P")"

Lord Evans of Temple Guiting: My Lords, this set of amendments contains various technical changes designed to ensure that the authorisation and other requirements in the Bill for different types of bodies and individuals apply effectively and consistently. This includes changes in relation to employees, employers and foreign lawyers; changes to ensure that the threshold provisions of the Part 5 licensing regime take account of current practice structures; and further provision for bodies formed under foreign law.
	Amendments Nos. 50, 51, 52, 54, 55, 57, 59, 61, 62, 622 and 623 do two things. First, they ensure that where an employer who is entitled to carry out reserved activities carries out a reserved legal activity through an individual who is not entitled, the employer will commit an offence. This would apply, for example, where the employer allows non-lawyers to conduct reserved activities without being supervised by lawyers. The employer would have a defence of reasonable precautions and due diligence, and the penalty for the offence and other related provisions, such as contempt of court, will be the same as presently set out in the Bill for the offence of carrying out reserved activities if not entitled.
	The amendments are being made to take account of the fact that that there could be instances where a company or firm could be active or complicit in the carrying on of reserved legal activities by an employee who is not individually entitled. The change therefore closes a potential loophole, which could be exacerbated with the increasing regulation of companies or firms as well as individuals, and ensures that sanctions in the Bill are targeted according to regulatory default. Secondly, these amendments ensure that both this offence and the other offence circumstances set out in Clauses 14 and 15 apply to employers whether they are bodies such as companies and partnerships or sole practitioners.
	Amendments Nos. 53, 56 and 68 are technical, ensuring that the Bill's treatment of employed lawyers is consistent and does not disrupt the status quo. To clarify, Amendments Nos. 53 and 56 amend Clause 15 to ensure that a body or individual whose business includes the provision of certain reserved activities to the public will still be able to use its own employed lawyers to carry out other reserved activities on its own behalf. It makes clear that a separate authorisation for further reserved activities will be necessary only where it is intended to provide reserved legal services to the public. Amendment No. 68 amends Schedule 3 to ensure that, where certain individuals are exempt from the requirement to be authorised to conduct reserved activities, employers on whose behalf the activities are conducted may also benefit from the exemption in appropriate circumstances.
	Amendments Nos. 86, 87, 312, 318 and 319 ensure that references to registered European lawyers, non-registered European lawyers and other foreign lawyers and practices are consistent with current statutory provisions, and do not disrupt the status quo. In particular, Amendments Nos. 318 and 319 amend Clause 108 to ensure that the definitions in Part 5 do not cause a large number of multinational firms to become alternative business structures purely by virtue of being partially owned by foreign lawyers.
	A further function of the amendments in this group is to make certain alterations to the detail of the Part 5 licensing regime to ensure that the requirements take account of current practice structures and regulatory practice. More specifically, Amendments Nos. 203 and 261 propose technical changes necessary to take account of the fact that members of firms such as limited liability partnerships are often other firms or bodies and not just individual lawyers, and to ensure that any bodies to which this applies are regulated appropriately.
	Amendments Nos. 256, 258, 259, 260 and 274 amend the licensing regime in Schedule 11 to make it clear that licensing authorities will have the flexibility to waive fees in appropriate cases. Amendments Nos. 262 to 273 amend Schedule 11 to provide that licensing rules must make provision for review by the licensing authority of a decision not to approve a person as head of legal practice or head of finance and administration, or to remove a person's designation in relation to one of those roles. This is consistent with the Government's policy; for example, provisions elsewhere in Schedule 11 stipulate that licensing rules must make provision for review of certain decisions that could affect the rights of licensed bodies or individuals within them.
	Amendment No. 305 makes it clear that the obligation which licensing authorities have to trace the beneficiaries of sums recovered following intervention in a licensed body's practice is an obligation to take such steps as are reasonable in all the circumstances of the case. This follows a similar amendment made to the intervention powers of the Law Society in Schedule 16 to the Bill, following an amendment tabled in Committee by the noble Lord, Lord Kingsland, which the Government agreed to consider. We are replicating that amendment in Schedule 14 because it is desirable for statutory intervention powers to be consistent where appropriate.
	Amendments Nos. 304, 627, 632 and 633 make technical changes to ensure that certain provisions in the Bill can be amended as necessary by secondary legislation in cases where it is necessary to take account of bodies formed under foreign law. I thank the noble Lord, Lord Kingsland, and the Law Society of Scotland for the point raised in Committee in relation to Clause 107, which my noble friend agreed to consider.
	Clause 107 enables the Lord Chancellor to modify the provisions of Part 5 in relation to bodies formed outside the law of the UK. The noble Lord queried whether this power should also apply in relation to bodies formed under the law of Scotland or Northern Ireland. The Government have considered this and agree that it would be desirable to extend the power, as the noble Lord suggested. Amendment No. 314 has therefore been tabled to achieve this. I note that the noble Lords, Lord Kingsland and Lord Hunt of Wirral, have added their names in support of this amendment, which reassures me that the Government have adequately accomplished the noble Lord's objectives in this regard.
	Amendments Nos. 627, 632 and 633 create a similar power for the Lord Chancellor to modify the current definition of manager, as set out in Clause 197 of the Bill, to ensure that it remains effective for bodies formed under law outside England and Wales. That is similar to the existing power in Clause 107 to modify the provisions of Part 5 that a new clause is required as the definition of manager applies to other parts of the Bill. The power will be subject to the affirmative resolution procedure.
	The amendments are technical, and essentially tighten up the existing provisions relating to the authorisation requirements for different types of bodies and individuals, and ensure, in particular, that the arrangements in Part 5 of the Bill provide for effective regulation and control of any firm's licence. Failure to make these changes would leave a number of uncertainties, inconsistencies and potential loopholes in the legislation, putting at risk both consumers and providers of legal services. The purpose of the amendments is to ensure that the detail of the regulatory framework can operate effectively and consistently. I beg to move.

Lord Kingsland: My Lords, in so far as these amendments, so eloquently introduced by the noble Lord, Lord Evans of Temple Guiting, reflect suggestions that we have made, we are most grateful.

On Question, amendment agreed to.

Lord Evans of Temple Guiting: moved Amendments Nos. 51 to 62:
	Clause 15, page 7, line 10, leave out "B" and insert "P"
	Clause 15, page 7, line 12, leave out "B" and insert "P"
	Clause 15, page 7, line 12, after first "activity" insert "("the relevant activity")"
	Clause 15, page 7, line 13, leave out "B" and insert "P"
	Clause 15, page 7, line 15, leave out "B's" and insert "P's"
	Clause 15, page 7, line 16, leave out "reserved legal activities carried on" and insert "the carrying on of the relevant activity"
	Clause 15, page 7, line 17, leave out "B in their capacity as employees of B" and insert "P in their capacity as employees of P"
	Clause 15, page 7, line 18, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 15, page 7, line 21, leave out "B's" and insert "P's"
	Clause 15, page 7, line 23, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 15, page 7, line 25, leave out subsection (8) and insert—
	"(8) If P is a body, references to an employee of P include references to a manager of P."
	After Clause 15, insert the following new Clause—
	"Offence to carry on reserved legal activity through person not entitled
	(1) Where subsection (2) applies it is an offence for a person ("P") to carry on an activity ("the relevant activity") which is a reserved legal activity, despite P being entitled to carry on the relevant activity.
	(2) This subsection applies if—
	(a) P carries on the relevant activity by virtue of an employee of P ("E") carrying it on in E's capacity as such an employee, and (b) in carrying on the relevant activity, E commits an offence under section 14.
	(3) If P is a body, references in subsection (2) to an employee of P include references to a manager of P.
	(4) In proceedings for an offence under subsection (1), it is a defence for the accused to show that the accused took all reasonable precautions and exercised all due diligence to avoid committing the offence.
	(5) A person who is guilty of an offence under subsection (1) is liable—
	(a) on summary conviction, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both), and (b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).
	(6) A person who is guilty of an offence under subsection (1) by reason of an act done in the purported exercise of a right of audience, or a right to conduct litigation, in relation to any proceedings or contemplated proceedings is also guilty of contempt of the court concerned and may be punished accordingly.
	(7) In relation to an offence under subsection (1) committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44), the reference in subsection (5)(a) to 12 months is to be read as a reference to 6 months."
	On Question, amendments agreed to.
	Schedule 3 [Exempt persons]:

Lord Evans of Temple Guiting: moved Amendments Nos. 63 to 70:
	Schedule 3, page 121, line 19, leave out sub-paragraph (9)
	Schedule 3, page 121, line 39, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 3, page 122, line 17, leave out sub-paragraph (5)
	Schedule 3, page 123, line 40, leave out sub-paragraph (9)
	Schedule 3, page 124, line 43, at end insert—
	"( ) The person is exempt if section 14 of the Public Notaries Act 1801 (c. 79) applies to the person, and—
	(a) where that section applies by virtue of the person holding or exercising an office or appointment, the person carries on the activity for ecclesiastical purposes; (b) where that section applies by virtue of the person performing a public duty or service under government, the person carries on the activity in the course of performing that duty or service."
	Schedule 3, page 125, line 17, at end insert—
	"Employers etc acting through exempt person
	(1) This paragraph applies where—
	(a) a person ("P") carries on an activity ("the relevant activity") which is a reserved legal activity, (b) P carries on the relevant activity by virtue of an employee of P ("E") carrying it on in E's capacity as such an employee, and (c) E is an exempt person in relation to the relevant activity.
	(2) P is an exempt person in relation to the relevant activity to the extent that P carries on that activity by virtue of E so carrying it on.
	(3) This paragraph does not apply where E—
	(a) carries on the relevant activity at the direction and under the supervision of an authorised person in relation to that activity, and (b) is exempt in relation to that activity by virtue of paragraph 1(7), 3(3) or 4(2).
	(4) If P is a body, in this paragraph references to an employee of P include references to a manager of P."
	Schedule 3, page 125, line 19, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 3, page 125, line 27, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Schedule 4 [Approved regulators]:

Lord Evans of Temple Guiting: moved Amendments Nos. 71 to 82:
	Schedule 4, page 126, line 28, at end insert—
	
		
			 "The Association of Law Costs Draftsmen The exercise of a right of audience. 
			  The conduct of litigation. 
			  The administration of oaths." 
		
	
	Schedule 4, page 127, line 8, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 127, line 23, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 131, line 20, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 131, line 25, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 131, line 32, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 131, line 33, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 131, line 37, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 131, line 39, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 132, line 3, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 132, line 6, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 4, page 132, line 8, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.

Lord Kingsland: moved Amendment No. 83:
	Schedule 4, page 132, line 40, leave out sub-paragraph (3) and insert—
	"(3) Alterations are exempt unless the Board has directed that they are not to be treated as exempt for the purposes of this paragraph."

Lord Kingsland: My Lords, The noble Baroness resisted this amendment in Committee. Her reasons for doing so, I fear, furnish further evidence that the Government are unwilling to reflect the principle to which they say they adhere—trust the approved regulator—on the face of the Bill.
	Our amendment reverses the presumption that the approval of the Legal Services Board should be needed before rule changes can come into effect. I do not believe that it would be helpful if I were to rehearse in detail a debate that stretched over seven columns—cols. 952 to 960—of Hansard on 22 January. In its course, apposite contributions were made by the noble and learned Baroness, Lady Butler-Sloss, the noble Viscount, Lord Bledisloe, the noble Lord, Lord Thomas of Gresford, and my noble friends Lord Campbell of Alloway and Lord Hunt of Wirral. The Minister made no fewer than 11 interventions in a courageous, but vain, attempt to vitiate their collective wisdom.
	I must confess that I remain at a complete loss to understand why the solution we propose would prove, as the noble Baroness asserted, considerably more bureaucratic and costly than that in the Bill. I believe that my view is shared by all noble Lords who participated in the debate. Under our scheme, the approved regulators will consult on all the changes they propose. The Legal Services Board will know what is intended well in advance of implementation. If it wishes to object, our amendment entitles it to do so. It is our amendment that reflects the underlying philosophy that the Government claim to espouse, not the draft provision in the Bill.
	It is worth recalling the Government's words in response to the report of the Joint Committee, which were that the Legal Services Board should exercise its powers only where the approved regulators were "clearly failing". The Legal Services Board is not there constantly to second-guess the judgment of the approved regulators. It is not its task to comb around looking for trouble. Moreover, it is not as if the approved regulators are composed exclusively of lawyers. Both the Bar and the Law Society regulatory institutions will have a substantial lay component. Of course, if cogent evidence is already available to the Legal Services Board that a particular rule change is likely to give rise to a net negative impact on the eight objectives, it is a different matter.
	The philosophy for the Government should be, as I said in Committee, "Trust the approved regulators". I beg to move.

Lord Carlile of Berriew: My Lords, I think that I am happy to say that I did not participate in the debate in Committee on this topic and that I was not present. However, I have enjoyed reading, with loving attention, every word of that debate. We on these Benches entirely agree with what has just been said by the noble Lord, Lord Kingsland.
	However, a practical problem occurs to me. During the debate on Monday, I declared my interest as head of a fairly large set of barristers' chambers in London. The way the system operates at the moment is that, from time to time, the General Council of the Bar—which was accurately described a few moments ago by the noble Lord, Lord Kingsland—has to react to problems that have arisen. On the whole, it reacts to them quickly. From time to time, I, as a head of chambers, receive an email telling me that there has been a change to the Bar Council's code of conduct, which is an important document that is frequently cited in court when issues of ethics arise during cases. If a head of chambers is responsible, he or she ensures that the communication from the Bar Council is instantly circulated to all barristers and clerks so that it is known to all the barristers within the collegiate atmosphere that still exists in many sets of chambers. Therefore, within a very short time of a critical incident arising, a change in the code of conduct can be communicated and put into practice. If necessary, it can be done in a couple of days. Without the amendment, the legislation would seek the inevitable introduction of a cumbersome, bureaucratic procedure, which will mean that an approved regulator—whose code of conduct so far as I am aware has rarely been criticised—will not be able to sustain that very useful and active discipline. I cannot believe that that is the Government's purpose, but it is the result of the legislation as it stands.
	I ask the Minister to respond to that point as it is causing some perplexity among those of us who practice at the Bar—led, as we have been from time to time with great practical effect, by people such as the noble Lord, Lord Brennan, who, when chairman of the Bar Council, took a leading part in ensuring that the code of conduct was kept up to date in the way I have described.

Baroness Ashton of Upholland: My Lords, I am not sure that my twelfth intervention will make a huge amount of difference. For the benefit of noble Lords who have not had the joy of participating in debates or reading Hansard, let me say that we were looking at two things: first, whether you had a situation where the board gets all the changes and then makes a decision on whether it wishes to have certain changes exempt from the process or with minimal review by the board; and, secondly, whether the board at the beginning says, "We don't want to see the following things" and that only those it wished to see should come forward.
	We looked at the matter in great detail. We considered how it would look if we redrafted it, and we had a good think about it. It is a choice we had to make, which I still think is the right one. We sought to say that our principle in setting up this new framework would be that changes should be sent to the board and that the board can say, either in the course of receiving those changes or, indeed, in advance, that it does not wish to receive certain ones, that some can be exempt and that some require merely minimal approval.
	The noble Lord, Lord Carlile, made a point about wanting to have the code of practice changes. I note his tribute to my noble friend Lord Brennan, which I share. We would want those done in the same way. We do not want this process to be bureaucratic. The question really came down to whether it is right that the board in advance says, "We don't need to see any of the following aspects", or should it receive them and then make a decision later about which it wishes to have exempt. So the question was: did the decision on that rest with the board or the regulator? It is not a question of trust. We hope that this will be one of the ways they will work closely together in partnership.
	However, we felt that it was important to leave the matter with the board. It was a choice we made. We do not think that the outcome will be hugely different because we believe that the board will swiftly move to say, "It is quite clear there are areas where we do not need to see the changes that are being made, or where we can deal with them very quickly".
	What I do know is—not in this area but in other areas of life—that small changes sometimes have big effects. Therefore, it is important for the new regime to enable the board to see the kind of changes being made and to be able to consider the effects being made. That was a decision we took.

Lord Kingsland: My Lords, I am most grateful to the noble Baroness for setting out the position that she previously set out at greater length, and perhaps with less continuity, than she has done this afternoon. She has not changed her position, but of course I always respect her for courageously sticking to her guns. However, her answer is not satisfactory to us. Although I shall not be seeking the opinion of the House on the matter today, I shall nevertheless consider whether it would be appropriate to return to the issue at Third Reading. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Schedule 5 [Authorised persons]:

Baroness Ashton of Upholland: moved Amendments Nos. 84 to 91:
	Schedule 5, page 137, line 7, after "Attorneys," insert—
	"( ) The Association of Law Costs Draftsmen,"
	Schedule 5, page 137, line 29, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 5, page 139, line 12, leave out "has the same meaning as in" and insert "means a registered European lawyer within the meaning of"
	Schedule 5, page 139, line 13, at end insert "who is registered with the Law Society."
	Schedule 5, page 141, line 2, at end insert—
	"(1) During the transitional period, a person ("P") is an exempt person in relation to the carrying on of an activity ("the relevant activity") which is a notarial activity if—
	(a) P carries on the relevant activity by virtue of an employee of P ("E") carrying it on in E's capacity as such an employee, and (b) E is an authorised person in relation to the relevant activity.
	(2) If P is a body, in this paragraph references to an employee of P include references to a manager of P."
	Schedule 5, page 142, line 14, after "mark" insert "attorney"
	Schedule 5, page 142, line 37, after "mark" insert "attorney"
	Schedule 5, page 143, line 2, at end insert—
	"Law costs draftsmen
	15A (1) During the transitional period, every authorised member of the Association of Law Costs Draftsmen is deemed to be authorised by that Association to administer oaths.
	(2) In this paragraph, "authorised member of the Association of Law Costs Draftsmen" means a member of that Association who has been authorised by that Association to carry on one or both of the following activities—
	(a) the exercise of a right of audience; (b) the conduct of litigation.
	(3) The authority conferred by sub-paragraph (1) is exercisable in accordance with and subject to the regulatory arrangements of the Association of Law Costs Draftsmen."
	On Question, amendments agreed to.
	Clause 22 [Transitional protection for non-commercial bodies]:

Baroness Ashton of Upholland: moved Amendment No. 92:
	Clause 22, page 11, line 23, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.
	Clause 23 [Extension of the reserved legal activities]:

Baroness Ashton of Upholland: moved Amendments Nos. 93 to 97:
	Clause 23, page 11, line 31, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 23, page 11, line 38, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 23, page 12, line 2, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 23, page 12, line 7, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 23, page 12, line 8, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 24 [Provisional designation as approved regulators and licensing authorities]:

Baroness Ashton of Upholland: moved Amendments Nos. 98 to 102:
	Clause 24, page 12, line 12, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 24, page 12, line 16, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 24, page 12, line 22, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 24, page 12, line 38, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 24, page 12, line 40, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 25 [Recommendations that activities should cease to be reserved legal activities]:

Baroness Ashton of Upholland: moved Amendments Nos. 103 to 107:
	Clause 25, page 13, line 6, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 25, page 13, line 8, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 25, page 13, line 10, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 25, page 13, line 11, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 25, page 13, line 12, leave out "Secretary of State's" and insert "Lord Chancellor's"
	On Question, amendments agreed to.
	Schedule 6 [Alteration of reserved legal activities]:

Baroness Ashton of Upholland: moved Amendments Nos. 108 to 113:
	Schedule 6, page 143, line 36, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 6, page 145, line 34, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 6, page 146, line 1, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 6, page 146, line 3, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 6, page 146, line 11, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 6, page 148, line 41, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 27 [Approved regulator's duty to promote the regulatory objectives etc]:
	[Amendment No. 114 not moved.]

Baroness Ashton of Upholland: moved Amendments Nos. 115 and 116:
	Clause 27, page 13, line 36, at end insert "and"
	Clause 27, page 13, line 38, leave out from "practice," to end of line 39
	On Question, amendments agreed to.
	Clause 28 [Prohibition on the Board interfering with representative functions]:
	[Amendment No. 117 not moved.]
	Clause 29 [Rules relating to the exercise of regulatory functions]:

Baroness Ashton of Upholland: moved Amendment No. 118:
	Clause 29, page 14, line 41, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.
	Clause 30 [Performance targets and monitoring]:

Lord Kingsland: moved Amendment No. 119:
	Clause 30, page 15, line 13, leave out "one or more of"

Lord Kingsland: My Lords, I shall also speak to all the other amendments in the group. At the risk of being accused of constant repetition, we believe it essential that the Bill reflects the Government's declared policy that the Legal Services Board should take action against the approved regulators only where they are, to use the Government's words, "clearly failing".
	At present, it does not. The thresholds for intervention are far too low; at their present level, the Legal Services Board becomes simply a front-line regulator, like the Financial Services Authority. The potential for constant interference by the board would go completely against Sir David Clementi's vision of the Legal Services Board as a small oversight body. Sir David Clementi said in his review of the legal services framework for England and Wales, published in 2004, at page 44:
	"The LSB should be a small oversight body, so delegation should be expected, subject to the Legal Services Board's satisfaction about competence and governance arrangements".
	Direct regulation by the Legal Services Board would also make the operation of the legislation inordinately costly.
	The amendments would incorporate that policy in the Bill by raising the threshold for intervention in two respects. The first is that the power of the board to intervene is triggered by an assessment of adverse impact on the eight regulatory objectives considered as a whole rather than individually. For example, it would not be reasonable for the Legal Services Board to take action that had an adverse impact on competition if the approved regulator's approach was necessary to improve access to justice and maintain adherence to the professional principles. However, it should be possible for the Legal Services Board to exercise power to act where the only adverse impact on the regulatory objectives was that it restricted competition, if that action could not be justified by reference to a benefit to the other regulatory objectives.
	Amendments Nos. 119 and 120 would bring Clause 30 into line with Clause 3(2) and Clause 27(2), which require the board and approved regulators respectively, in discharging their duty, to promote the regulatory objectives so far as it is reasonably practical; to act in a way,
	"which is compatible with the regulatory objectives".
	That form of words recognises that the regulatory objectives may pull in different directions. The approved regulator may have to balance the objectives, and, in the words of the noble and learned Baroness, Lady Butler-Sloss, on Second Reading,
	"to decide that one objective takes precedence over another, in which case there is likely to be an adverse effect on one of the objectives. Consumer protection or the rule of law may, for example, need to take precedence over competition".—[Official Report, 6/12/06; cols. 1194-95.]
	Yet the Bill entitles the board to intervene to penalise a regulator who had exercised legitimate discretion in a balancing exercise.
	In making its analysis, the Legal Services Board should trust the judgment of the approved regulator, unless it has good reason not to do so. This is especially so now that the regulatory and representative functions of the Law Society and the Bar Council have been clearly separated. The new approved regulators will have substantial lay representation, and all members will have to be selected on the basis of Nolan principles. In other words, the composition of these bodies will look very like the composition of the Legal Services Board. It must follow that the board should not exercise its powers simply because it would have reached a different decision on the same matter. The board should intervene only if it is clear that the conduct of an approved regulator in some way fell short of reasonableness.
	I can deal much more telegraphically with the second line of issues to which the amendments give rise. There should be some qualifying adjective about the degree of adverse impact before the Legal Services Board invokes its powers. We have chosen the word "significant", but "serious" or "substantial" would be equally acceptable. Almost any exercise of its function by an approved regulator will have at least some adverse effect on at least one of the regulatory objectives. I beg to move.

Lord Carlile of Berriew: My Lords, we on these Benches agree with the noble Lord, Lord Kingsland, that Clause 30 imposes too light a trigger on the exercise of what, on the face of it, are draconian powers that could lead to an approved regulator ceasing to be so approved. The concept of compatibility with the regulatory objectives as a whole is recognised as an holistic, inclusive concept in Clause 3. We believe that that concept should be in Clause 30. Indeed, it is plain common sense that there should be this inclusive view of what Clause 3 calls,
	"compatible with the regulatory objectives".
	One can think of many examples in which there could be conflict between some of the regulatory objectives set out in Clause 1(1) but not with the regulatory objectives as a whole. A simple example of this is,
	"protecting and promoting the interests of consumers",
	in Clause 1(1)(c). There may be very good reasons for a professional body saying that no lawyer should conduct a clinical negligence case unless that lawyer has some training and experience in conducting those cases. However, part of the regulatory objectives in Clause 1(1)(d) is to promote,
	"competition in the provision of services within subsection (2)".
	My understanding is that in north Wales, for example, only one solicitor—there may be more now, but certainly a few months ago there was only one—had the approval to carry out clinical negligence cases and so receive funding from the Legal Services Commission. There is plainly a conflict between competition and a decision that only people who are really competent to do certain types of cases should do them. The provisions we are considering could be triggered not by the consideration of those two regulatory objectives together but by one of them alone without considering the other. It seems a matter of practical common sense that the approach taken in Clause 3(2)(a) should be consistently applied throughout the Bill.

Baroness Butler-Sloss: My Lords, I retain the concerns that I expressed earlier. This ought to be looked at. To have a single adverse impact is inadequate to achieve the light touch that is needed.

Lord Hunt of Wirral: My Lords, I agree. At paragraph 178 of the Joint Committee report on the draft Legal Services Bill we unanimously agreed that amendments of this type should be brought forward. We regret that the Minister has not yet done that and await her words with great interest.

Lord Campbell of Alloway: My Lords, I support this amendment, but I have to do so having moved Amendment No. 5, which is related to this amendment. There, I deal with the balance of the relevant regulatory objectives as the basis for a reasoned decision. This amendment rides totally in relation to that. It is very interesting that this balance was approved by the Minister on the first day of Report. She said:
	"The board, while operating within the objectives, must balance those objectives appropriately, as noble Lords seek".—[Official Report, 16/4/07; col. 102.]
	There is not much between us on the fundamental principle. If there is, I do not know what it is. On that basis, I support the amendment.

Lord Brennan: My Lords, this group of amendments deserves serious consideration by the Government. Here is a Bill to introduce a super-regulator, the Legal Services Board. They have said that it can be clothed and armed with heavyweight powers but that it will operate with a light touch. Such confidence in regulatory self-denial suggests inconsistency with ordinary human experience. I therefore invite the Minister to consider this state of affairs. If you have a series of separate objectives which can be separately considered, and any one of them will allow the trigger of intervention, the legal services world, to be so regulated, would reasonably expect the board at the very least to have a statement of policy on how it will implement these single objectives at any one time or in combination. These amendments suggest, by the introduction of the words "one or more" or "significant", that you create a state of affairs where there is a policy base for the Legal Services Board to act on.
	"Significant" is a pretty poor adjective, but if it is there to achieve compromise then it is better than nothing. It might be said that it is the kind of word which is so vague as to be incapable of challenge legally or intellectually, but I remind the House that in the Corporate Manslaughter and Corporate Homicide Bill we enacted the use of the word "substantial" as a core ingredient in the creation of a new criminal offence, confident that any jury would understand how it was to be understood and applied. I hope that in dealing with the amendments it will be accepted that this is a desire not to control power exercisable by the Legal Services Board but rather to seek a framework in which the legal services world can operate more efficiently.

Baroness Ashton of Upholland: My Lords, my ambition is that the Legal Services Board will never have to use its powers. The difficulty is that when one sets up in legislation a system that enables action to be taken when things go wrong, the implication or assumption is that the relationship will be a negative one. Our ambitions are more positive. We have talked about partnership, a light touch and how we expect the regulator to operate in an overarching and not an overbearing way. On that I think we are all agreed. Where the board might find itself having to use these powers, we are also all agreed that they should be used appropriately, expediently and efficiently. They should not be used in any inappropriate way, and that is why we have laid out in Clauses 30 to 34 what the powers are, how they are to be used and so forth, and why in Clause 48 we have enabled the board to produce policy statements about its powers and other matters. It is also why in Clause 3 we have said that the board must act within the best regulatory practice. We believe that the objective sought by noble Lords, particularly in the example given by the noble Lord, Lord Carlile, of medical negligence cases, would be covered by the combination of regulatory objectives and the way in which the board will operate. The noble Lord gave a good example of where I would not expect the board to use its power.
	The question is whether there could be circumstances where problems had arisen with one of the objectives and it was felt that action should be taken. The difficulty with the amendment is that it would mean, in effect, that the board would have to look at all the objectives to see whether they, too, were being—I use the word advisedly—flouted. I cite as an example access to justice, an extremely important issue that we have debated and will continue to debate on Report. There could be an issue on which the board felt it had to act but, on the basis of this amendment, it could not act because the other regulatory objectives were not being damaged. That would hinder the operation of the board in a way that I do not think noble Lords want.
	The adjective "significant" was proposed, although the noble Lord, Lord Kingsland, said that other adjectives could be used. Again, the difficulty for the board is that "significant" when considered from the legal perspective—noble Lords know that I am not a lawyer but I do take legal advice—could hinder the board from operating. For example, if the board were working with a small regulator, could a case where only very few people were affected, albeit extremely adversely, be considered significant? Ultimately it would be for the courts to decide, but from the perspective of this legislation, we do not want to put the board in a position where it feels disempowered to act because of the word "significant". However, we believe that the objectives sought by the noble Lord, Lord Kingsland, in this amendment are already achieved in the Bill.
	Noble Lords are right to want to ensure that the board operates properly, that it considers carefully what is happening and why, that it does not take inappropriate action, is light touch in its operations and conforms to good regulatory practice. All that is already set out in the Bill; therefore there is nothing between us in terms of what is required.

Viscount Bledisloe: My Lords, I should like to understand what the Minister was saying a little earlier. Is she saying that the condition proposed by the amendment, "an adverse impact on the regulatory objectives taken as a whole", would only be met if all the objectives were adversely affected? I do not understand it that way. As I understand it, you look at the totality of the objectives and ask whether some of them are adversely affected and whether that consideration is not outweighed by improvement to the other objectives. Surely that is what one is meant to be doing. If the Minister is really saying that the provision can only be triggered if all the objectives are adversely affected, I see great force in her argument, but I do not think that that is what the amendment begins to say.

Baroness Ashton of Upholland: My Lords, the noble Viscount—for me, anyway—makes my point. "Taken as a whole" means taken as a whole; if a regulatory objective that said "supports the constitutional principle of the rule of law" were being damaged in some way, but every other objective was being met in a way that we would applaud, the board, according to what I believe the noble Viscount said, could not act. I am saying that the board must be able to act. Of course—I have been explicit about this, and I think I have been quoted on it—the balance with what is happening, which is where the example of the noble Lord, Lord Carlile, comes in, is critical. That is what good regulatory practice says under Clause 3, and it is what the board is required to do. Under the amendment, the board simply could not act if there was a serious problem on the rule of law, access to justice or other aspects of the regulatory objectives that noble Lords might feel are more important than others but the other objectives were not affected. That is not what we would wish to see.

Viscount Bledisloe: With respect, my Lords, the Minister misunderstood the intent of the amendment, as I understand it, and its wording. "Taken as a whole" is very different from "all the objectives". If the Bill said, "had an adverse impact on all the regulatory objectives", I would see her point, but it does not. I think she seriously needs to think again about the effect of the amendment.

Baroness Ashton of Upholland: My Lords, I am grateful to the noble Viscount—

Lord Campbell of Alloway: My Lords, I have a simple question. Does the Minister really understand what is being said, and said particularly well by the noble Lord, Lord Brennan: what we are creating is, so to speak, a structure for a judicial approach? That is the basis; we are not saying any more than that.

Baroness Ashton of Upholland: My Lords, I understand my noble friend Lord Brennan—he has given me some of his time to discuss this—and the noble Viscount. But I wish to explain how the reasons for which noble Lords seek this provision in the legislation are already dealt with in the Bill therefore they need not move their amendments. The amendments as framed would not have beneficial implications for the regulatory framework that we seek to set out. That is the fundamental difference between us. I am arguing that the amendments are unnecessary to achieve what is required and can therefore safely be withdrawn without fear that there will be a problem in the running of the Legal Services Board.

Viscount Bledisloe: My Lords, I understand the Minister—

Lord Evans of Temple Guiting: My Lords, we are on Report, and the Minister has now sat down.

Viscount Bledisloe: My Lords, am I in order or not?

Noble Lords: No.

Lord Kingsland: My Lords, the noble Viscount has already deployed his immense gifts for oratory to very considerable effect. He has helped to sharpen and define exactly what the issue is between us and the Government.
	In my opening remarks, I drew your Lordships' attention to some observations made by the noble and learned Baroness, Lady Butler-Sloss, at Second Reading, when she pointed out that almost inevitably, where you have eight objectives, there will be some conflict between them: some will pull in one direction, some will pull in another. At the end of the day, a balanced view has to be taken about whether the importance of one regulatory objective outweighs the other. That is essentially the point the noble Viscount, Lord Bledisloe, has made and is exactly the intention behind the amendment.
	We have had a number of exchanges with the Government about these issues; the time has come to test the opinion of the House.

On Question, Whether the said amendment (No. 119) shall be agreed to?
	Their Lordships divided: Contents, 184; Not-Contents, 132.

Resolved in the affirmative, and amendment agreed to accordingly.

Lord Kingsland: moved Amendment No. 120:
	Clause 30, page 15, line 13, after "objectives" insert "taken as a whole"
	On Question, amendment agreed to.
	Clause 31 [Directions]:

Lord Kingsland: moved Amendments Nos. 121 to 123:
	Clause 31, page 16, line 2, leave out "an" and insert "a significant"
	Clause 31, page 16, line 2, leave out "one or more of"
	Clause 31, page 16, line 3, after "objectives" insert "taken as a whole"
	On Question, amendments agreed to.
	Schedule 7 [Directions: procedure]:

Baroness Ashton of Upholland: moved Amendments Nos. 124 and 125:
	Schedule 7, page 150, line 27, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 7, page 150, line 36, leave out from "The" to "thinks" in line 37 and insert "Lord Chancellor must give the Board such advice as the Lord Chancellor"
	On Question, amendments agreed to.
	Clause 34 [Public censure]:

Lord Kingsland: moved Amendments Nos. 126 to 128:
	Clause 34, page 17, line 15, leave out "an" and insert "a significant"
	Clause 34, page 17, line 15, leave out "one or more of"
	Clause 34, page 17, line 16, after "objectives" insert "taken as a whole"
	On Question, amendments agreed to.
	[Amendment No. 129 not moved.]
	Clause 35 [Public censure: procedure]:
	[Amendment No. 130 not moved.]
	Clause 36 [Financial penalties]:

Baroness Ashton of Upholland: moved Amendment No. 131:
	Clause 36, page 18, line 4, leave out paragraph (a) and insert—
	"(a) that an approved regulator has failed to comply with a requirement to which this section applies, and"

Baroness Ashton of Upholland: My Lords, I wish to speak also to Amendments Nos. 136, 137, 140 to 145 and 175. In Committee, noble Lords presented a number of characteristically persuasive arguments questioning the way in which the board's fining power is intended to operate. Having had the opportunity to reflect on those arguments, I am persuaded of the case for change. I am therefore bringing forward amendments to limit the circumstances in which the board may exercise its power to fine to those instances where an approved regulator has failed to separate its regulatory and representative functions in accordance with rules made under Clause 29, failed to comply with a direction made under Clause 31, or failed to comply with Clause 50 or rules made under that clause relating to practising certificate fees. These are all issues over which the approved regulator has both the responsibility for the issue and the ability to control outcomes. In these instances, it is clearly right that the board should be able to issue a penalty if it considers that that is the most effective course of action.
	Consumer groups have argued strongly against constraining the fining power; they see the board's power to impose a financial penalty as an important part of a regulator's toolkit and one that, when used, will send a clear and public message to consumers that regulators have the ability and willingness to act on their behalf. To an extent we accept that view, but noble Lords will see that I have tabled amendments to determine the circumstances.
	We have also lengthened the time within which an approved regulator can appeal a financial penalty from 42 days to three months. We accept the view of the noble Lord, Lord Kingsland, that the timeframe within which to appeal should reflect the timeframe for judicial review.
	I hope that noble Lords will recognise that the Government have listened to their concerns and that we have moved to constrain the fining power and to extend the arrangements to challenge the use of that power. I believe that, in doing that, we have gone as far as is reasonable. I hope that noble Lords will accept these amendments. I beg to move.

Lord Kingsland: My Lords, we thank the Government for tabling amendments to restrict the power to fine to circumstances where an approved regulator fails to comply with a direction, or breaches the provisions concerning separation of regulatory from representative functions or the use of the practising certificate fee. This largely takes care of the concerns that we expressed about being fined for matters that are outside the control of the representative bodies. I am most grateful.

On Question, amendment agreed to.

Lord Kingsland: moved Amendments Nos. 132 to 134:
	Clause 36, page 18, line 5, leave out "an" and insert "a significant"
	Clause 36, page 18, line 5, leave out "one or more of"
	Clause 36, page 18, line 6, after "objectives" insert "taken as a whole"
	On Question, amendments agreed to.

Lord Kingsland: moved Amendment No. 135:
	Clause 36, page 18, line 6, after "objectives," insert—
	"( ) that the approved regulator has failed to comply with a direction made under section 31,"

Lord Kingsland: My Lords, we are extremely grateful to the Government for the amendments that they have just brought forward. However, they have not yet accepted the general principle that fines should be imposed only where no lesser sanction is appropriate. They have, of course, included that principle in Clauses 40 and 44, which deal with intervention and the cancelling of approved regulators' designations; and in other contexts, they have accepted that the power to fine is significantly different from the powers to give directions, to set targets and to censure. For example, the Bill provides for appeals against fines. In dealing with an amendment moved by my noble friend Lord Campbell of Alloway concerning judicial review, in respect of Legal Services Board directions, the Minister said that,
	"the fining power within the Bill is, we believe, a stronger power. Noble Lords and those who are being regulated may also feel that it is stronger, more definitive and has potentially greater and far-reaching consequences. We therefore wanted to add the ability to go to appeal specifically around that power. So we did so, by saying that there would be leave to go to the High Court to appeal on that power".—[Official Report, 23/01/07; col. 1013.]
	Given that fines are a significantly stronger power, we think it essential that they should be used only where no lesser sanction would suffice. Providing for appeals against fines is not enough. It is important to ensure that the basis on which fines may be imposed is properly defined in the first place. Indeed, the Minister appeared to accept that proposition in the discussion on my amendment concerning appeals against public censure. The Minister said:
	"For me, designing a board by saying, 'This is how you must behave' is a better way of achieving what I think the noble Lord is seeking—that is, it ensures that the board does not exercise its power inappropriately or heavy-handedly and so on. There is unanimity in the Committee about light-touch supervisory regulation. No one has argued against that and the Government do not either. Therefore, how the board uses its powers is about saying, 'You must behave in this way', rather than trying to develop criteria for when it would use them".—[Official Report, 23/01/07; col. 1019.]
	The Minister sought to justify the power to fine by references to the position of other regulators, including the Financial Services Authority and Ofgem; but both of those directly regulate service providers. They do not supervise other regulators and they do not supervise supervisors, as in this case. The only example that supports the Minister's case is the existing power of the Legal Services Complaints Commissioner. Power for a supervisory regulator to fine another regulator is very unusual and needs to be confined to circumstances where no other sanction is appropriate. Nevertheless, we have sought, in the circumstances, to limit the power to fine in the ways set out in the amendment. I beg to move.

Baroness Ashton of Upholland: My Lords, I am grateful for the explanation that the noble Lord has given, but I am not persuaded that I want to go further. The noble Lord was gracious in seeing that I had responded to the comments made in Committee and in our conversations with the Law Society and the Bar Council. We do not want to see the fining power in the same category as the powers to intervene directly with approved regulators or to cancel an approved regulator's designation. Those are very different, but that would be the effect of Amendment No. 135. We do not believe that the fining power is of the same order of magnitude.
	On a more practical level, the amendment would reduce the board's ability to make a flexible response to a regulatory failure. The argument in the Macrory review, as noble Lords will know, is that the move is towards greater flexibility where sanctions are used. We have already said many times in the passage of this legislation that we hope that these sanctions will not be used. However, where they are used, the argument is to enable those using them to have the greatest possible flexibility to use the most appropriate sanction at any given time.
	I indicated that, in our discussions with consumer groups, they expressed great concern that we should not constrain the fining power because they saw it as an important part of a regulator's toolkit, which, if it were to be used, would send the clear and important message that the regulator was willing to act on their behalf.
	We believe that we again have the right balance. We have made a move to accept in part what the noble Lord, Lord Kingsland, said in Committee about my previous amendments following discussions with the regulatory bodies, but it is important to retain flexibility and, therefore, we must ask the noble Lord to withdraw his amendment.

Lord Kingsland: My Lords, I am most grateful for the noble Baroness's response and I am aware that she has already given some ground in this area by the amendments to which she spoke in the previous group on the list. I am disappointed at her reply; but, bearing in mind that there has been some movement by the Government, I shall hope for some more movement between now and Third Reading. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Ashton of Upholland: moved Amendments Nos. 136 and 137:
	Clause 36, page 18, line 8, at end insert—
	"( ) This section applies to any requirement imposed on the approved regulator—
	(a) by rules under section 29 (internal governance rules), (b) by a direction given under section 31 (Board directions), or (c) by section 50 (control of practising fees charged by approved regulators) or by rules under that section."
	Clause 36, page 18, line 9, leave out from "the" to ", of" in line 10 and insert "failure"
	On Question, amendments agreed to.
	[Amendment No. 138 not moved.]

Baroness Ashton of Upholland: moved Amendments Nos. 139 and 140:
	Clause 36, page 18, line 14, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 36, page 18, line 17, leave out subsection (6)
	On Question, amendments agreed to.
	Clause 37 [Financial penalties: procedure]:

Baroness Ashton of Upholland: moved Amendments Nos. 141 to 143:
	Clause 37, page 18, line 27, leave out "acts or omissions" and insert "failure"
	Clause 37, page 19, line 7, leave out "acts or omissions" and insert "failure"
	Clause 37, page 19, line 10, leave out "42 days" and insert "3 months"
	On Question, amendments agreed to.
	Clause 38 [Appeals against financial penalties]:

Baroness Ashton of Upholland: moved Amendments Nos. 144 and 145:
	Clause 38, page 19, line 35, leave out "42 days" and insert "3 months"
	Clause 38, page 19, line 39, leave out "42 days" and insert "3 months"
	On Question, amendments agreed to.
	Clause 40 [Intervention directions]:

Lord Kingsland: moved Amendments Nos. 146 to 148:
	Clause 40, page 20, line 40, leave out "an" and insert "a significant"
	Clause 40, page 20, line 40, leave out "one or more of"
	Clause 40, page 20, line 41, after "objectives" insert "taken as a whole"
	On Question, amendments agreed to.
	Clause 41 [Intervention directions: further provision]:

Baroness Ashton of Upholland: moved Amendments Nos. 149 to 151:
	Clause 41, page 21, line 34, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 41, page 22, line 1, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 41, page 22, line 5, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Schedule 8 [Intervention directions: procedure]:

Baroness Ashton of Upholland: moved Amendments Nos. 152 to 155:
	Schedule 8, page 154, line 10, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 8, page 154, line 19, leave out from "The" to "thinks" in line 20 and insert "Lord Chancellor must give the Board such advice as the Lord Chancellor"
	Schedule 8, page 157, line 27, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 8, page 157, line 36, leave out from "The" to "thinks" in line 37 and insert "Lord Chancellor must give the Board such advice as the Lord Chancellor"
	On Question, amendments agreed to.
	Clause 44 [Cancellation of designation as approved regulator]:

Baroness Ashton of Upholland: moved Amendments Nos. 156 to 158:
	Clause 44, page 22, line 30, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 44, page 22, line 36, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 44, page 23, line 10, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.

Lord Kingsland: moved Amendments Nos. 159 to 161:
	Clause 44, page 23, line 15, leave out "an" and insert "a significant"
	Clause 44, page 23, line 15, leave out "one or more of"
	Clause 44, page 23, line 16, after "objectives" insert "taken as a whole"
	On Question, amendments agreed to.

Baroness Ashton of Upholland: moved Amendments Nos. 162 to 164:
	Clause 44, page 23, line 25, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 44, page 23, line 26, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 44, page 23, line 28, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Schedule 9 [Cancellation of designation as approved regulator]:

Baroness Ashton of Upholland: moved Amendment No. 165:
	Schedule 9, page 163, line 24, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.
	Clause 45 [Cancellation of designation: further provision]:

Baroness Ashton of Upholland: moved Amendments Nos. 166 to 169:
	Clause 45, page 23, line 38, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 45, page 23, line 43, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 45, page 23, line 45, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 45, page 24, line 25, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 46 [The Board's power to recommend orders made under section 45]:

Baroness Ashton of Upholland: moved Amendments Nos. 170 to 173:
	Clause 46, page 25, line 2, leave out "Secretary of State that the Secretary of State" and insert "Lord Chancellor that the Lord Chancellor"
	Clause 47, page 25, line 35, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 47, page 26, line 3, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 47, page 26, line 7, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 48 [The Board's policy statements]:

Lord Kingsland: moved Amendment No. 174:
	Clause 48 , page 26, line 29, at end insert—
	"( ) Any statement of policy issued by the Board must—
	(a) respect the principle that primary responsibility for regulation rests with the approved regulators; (b) ensure that the Board exercises its powers only where it considers that the action or inaction of an approved regulator is not an approach which the approved regulator could reasonably have taken; (c) provide that, save where there is an imminent risk of significant damage to the regulatory objectives, the Board will seek to resolve matters informally with the approved regulator before seeking its powers."

Lord Kingsland: My Lords, when Sir David Clementi issued his consultation paper on the appropriate structure for the regulation of legal services, he canvassed two main options. The first was for a unitary system of regulation with a body on the same lines as the Financial Services Authority taking over responsibility from the professional bodies and other front-line regulators in the legal field. The second is the continuation of regulation based on the professional bodies but with a new board with supervisory powers to ensure that the approved regulators carry out their tasks effectively and in the public interest. Sir David's final report, reflecting the great preponderance of responses to the consultation, favoured the second option.
	The Government appeared to accept this approach. In their response to the Joint Committee report by both Houses, they said:
	"The government agrees that the intention of the Legal Services Board should be to work in partnership with the authorised regulators, leaving them with the responsibility for day to day regulation. The Legal Services Board should exercise its powers only where approved regulators are clearly failing".
	However, the Bill does not, as we have seen on so many occasions, make it clear that the lead responsibility for regulation is intended to rest with the professional bodies, with the Legal Services Board exercising its powers only in the event of significant regulatory failure. Consequently, there is nothing in the Bill to indicate that the Legal Services Board is intended to act as a supervisory regulator, leaving the day-to-day responsibility for regulation with the approved regulators and exercising its powers only where they are clearly failing.
	The Bill is cast in terms that would enable the Legal Services Board to set out detailed templates for the way in which it considers that approved regulators should discharge their functions, to micromanage them and to substitute the board's view for that of an approved regulator, even where the approved regulator's approach is plainly within the range of reasonable decisions.
	When we discussed this amendment in Committee, the noble Baroness indicated sympathy for the principle behind the amendment, although she said that she would have some reservations about the drafting. However, she felt that it was unnecessary to include any provision on the face of the Bill. The noble Baroness said:
	"I do not rule out other mechanisms whereby the Government explain precisely what we are looking for in bodies being established ... Governments have on many occasions issued statements, had discussions with bodies and so on. I was trying not to rule any of that out."—[Official Report, 23/1/07; col. 1045.]
	The prospect of the Government's supplementing the statute through subsequent guidance to the Legal Services Board is, frankly, disturbing. Such guidance may be appropriate with bodies that undertake what are essentially government functions but it is a matter of constitutional importance that the Legal Services Board—the supervisory regulator for the legal profession—should be wholly independent of government. The board should operate in accordance with the statutory provisions and any regulations made under them. It should not be subject to informal guidance from government.
	The Minister's comments reinforce the need for Parliament to set out clearly, through mechanisms such as this proposed amendment, what the relationship between the Legal Services Board and the approved regulators should be. It would be very damaging were the Legal Services Board to act in an over-intrusive way. As the Joint Committee noted, the estimates for the cost of the Legal Services Board are credible only on the assumption that it acts as a light-touch regulator.
	We have already seen that the establishment costs of this institution are likely to be in the area of £40 million and the running costs, £30 million. If it is operated in the more intrusive way made possible by the Bill as presently drafted, the cost of this tier of regulation will rise substantially, as will the costs of the approved regulators in dealing with the Legal Services Board. Furthermore, if the Legal Services Board acts as the primary regulator, treating the approved regulators as its administrative outposts rather than as the lead regulators that they are intended to be, it will become impossible for the approved regulators to attract and retain the calibre of staff that they need to discharge their responsibilities effectively. The result would be a gradual drift towards an FSA style of regulation, in substance if not in name.
	The proposed amendments to Clause 48 are designed to ensure that the Legal Services Board, in its relationship with the approved regulators, acts as the Government say they intend it to do. I beg to move.

Lord Carlile of Berriew: My Lords, I do not want to repeat what was said by others at the previous stage of this Bill, particularly as my noble friend Lord Maclennan is inclined to use colourful language from time to time. He described Clause 48 as an "incubus", prompting an exchange about the writings of Edgar Allan Poe, which the Minister, understandably, told us she had no time to read at present. I also think that my noble friend Lord Maclennan described the Legal Services Board as a "behemoth" the other day. Whatever colourful language one uses, it is very important for approved regulators to know what it is.
	We have heard repeated statements of policy, which of course we take at face value, stating that this is intended to be light-touch regulation. In Clause 48, we have a single clause that deals with the way in which policy statements are to be issued, and the approved regulators will look to this clause and what goes with it to understand their relationship with the Legal Services Board. If ever there was a place where the policy should be expressed and where it should be made clear that the policy is that there should be light-touch regulation, this is it. I hope that the Minister will accept that these amendments, whether or not the wording is perfect, are intended to ensure that, in this crucial policy section of the Bill, the approved regulators will see a demonstration of that light-touch approach. It is not anywhere in the Bill at present, and this surely is the place in which to position it.

Lord Hunt of Wirral: My Lords, I strongly agree with my noble friend Lord Kingsland who put this amendment and those linked with it in context. This is probably one of the most important debates that we are going to have. During the Joint Select Committee meetings, we spent considerable time seeking reassurance from the Minister that the regulator would administer a light-touch system of regulation. I recall that the Minister's colleague, Bridget Prentice, emphatically told us just that,
	"Where the approved bodies are operating effectively, the LSB will leave them to get on with that job properly".
	That has been the whole basis on which we have proceeded. I await the Minister's words with great anticipation, as I sensed, during that important debate in Committee, that she was exceedingly sympathetic to the approach that we are now taking. I look forward to her accepting this important amendment.

Lord Mackay of Clashfern: My Lords, I had understood that the noble Baroness clearly embraced the principle of light touch—or however one cares to express it. So far, I have not found in the Bill anything that expresses that. I do not think that I would expect to find the expression "light touch" in the Bill but I would expect to find words that convey that impression to me. Up until now, I have not seen them. Maybe the Minister's reply will demonstrate that for the first time.

Baroness Ashton of Upholland: My Lords, I am always trying to address concerns raised by the noble and learned Lord, Lord Mackay of Clashfern, with great trepidation. I hope that I will succeed, but I do not pretend that I have great confidence. As the noble and learned Lord said, this is about light-touch regulation. As for the language of the noble Lord, Lord Maclennan of Rogart, I blame his education at Balliol; I hope he reads this.
	I was and have been sympathetic to many of the issues raised because there is nothing between us in wanting to establish the right relationship with the supervisory regulator, one which is light-touch but with powers to act if necessary. The question is always how to translate that into legislation, as noble Lords who have stood at this Dispatch Box in more eminent positions than mine will know. It is also important that, in trying to further define legislation, one ends up changing, altering, constraining and restricting how a body may operate.
	The Bill sets the board as an oversight regulator, and makes it supervisory in nature. We recognise the significant benefits in this model. It is entirely right that approved regulators have the freedom to make the right regulatory decisions, in keeping with their duties under Clause 27 and in line with best regulatory practice, but should the board need to—and I hope it does not—it must be able to take effective action. Trying to further define what is called the B+ model, with which noble Lords will be familiar, in statute may be potentially restrictive.
	In Committee, I expressed concerns about the amendment to Clause 48, in particular about the formulation of limbs (b) and (c), which set new thresholds over and above those already in the Bill. For each of the regulatory powers, the board must already meet statutory criteria and we have set out clear procedures that must be followed before a power is used. Let us not forget that Clause 48 already obliges the board to make policy statements in respect of how it will exercise its powers under the Bill, and these will need to be consistent with the principles of transparency, proportionality and the other better regulatory principles in Clause 3, which apply to the exercise of all the board's functions, including the making of policy statements.
	Within the legislation, we have already met the objectives that the amendments seek to meet, through the role of the regulatory bodies in Clause 27 and how Clause 3 operates. My difficulty is that the amendments move us beyond that, to constrain and change in a way we would not be able to accept. I have enormous warmth towards the objectives behind these amendments, but they do not take us any further forward. Rather, they constrain.

Lord Carlile of Berriew: My Lords, I apologise for interrupting the Minister. She referred to Clause 27, which is a good example of the complaint that those of us who have spoken to the amendments are making. Where in Clause 27—or anywhere else in the Bill, for that matter—do we find any concession to the discretion, judgment and competence of approved regulators? They have been much praised in debate, but are barely recognised or praised in the Bill. The Minister speaks of a light touch, but Clause 27 has a heavy hand. Should not something in the Bill be seen to be statutory light touch?

Baroness Ashton of Upholland: My Lords, my interpretation of Clause 27 may differ from that of the noble Lord. It says, of the approved regulator's duty:
	"In discharging its regulatory functions ... an approved regulator must comply with the requirements of this section"—
	and that it,
	"must, so far as is reasonably practicable, act in a way ... compatible with the regulatory objectives, and which the ... regulator considers most appropriate for the purpose of meeting those objectives" .
	It then says that the regulator,
	"must have regard to ... the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed [and] any other principle appearing to it to represent the best regulatory practice, and ... the public interest".
	Within that context, that reflects the approved regulator's duty and enables it to act within the principles set out in the Bill. The noble Lord may disagree with me—I realise he does from his expression and head movements—but we have achieved that, and I hope that the noble Lord, Lord Kingsland, will withdraw his amendment. We are on Report, I am sitting down.

Lord Kingsland: My Lords, I am grateful to the Minister. We know from what she said in Committee that she supports the principle behind the amendment. However, we have also heard today that she is reluctant to see that principle expressed in the Bill. She said that she was against any attempt to further define the relationship between the Legal Services Board and the approved regulator. However, my complaint and that of my noble and learned friend Lord Mackay is that there is no definition at all in the Bill of the relationship between the Legal Services Board and the approved regulator, reflecting the principle of lightness of touch, which all government Ministers have said ought to be the prevailing principle.
	We have debated this matter at great length for many months. It is time to test the opinion of your Lordships' House.

On Question, Whether the said amendment (No. 174) shall be agreed to?
	Their Lordships divided: Contents, 169; Not-Contents, 130.

Resolved in the affirmative, and amendment agreed to accordingly.

Baroness Ashton of Upholland: moved Amendment No. 175:
	Clause 48 , page 26, line 32, leave out from second "the" to "in" and insert "failure"
	On Question, amendment agreed to.
	Clause 53 [Regulatory conflict with other regulatory regimes]:
	[Amendment No. 176 not moved.]

Lord Kingsland: moved Amendment No. 176A:
	Clause 53 , page 30, line 6, at end insert—
	"(2A) The Board may agree to exercise functions under regulatory arrangements made for the purposes of subsection (1)(b).
	(2B) Any resolution of an external regulatory conflict in accordance with the regulatory arrangements of an approved regulator (whether by the Board or any other person)—
	(a) binds an external regulatory body only if, or to the extent that, the body agrees with the approved regulator to be so bound, and (b) is subject to any provision made by or by virtue of this Act or any other enactment.
	(2C) An approved regulator must consider any request made by an external regulatory body for the approved regulator to reconsider any provision made by its regulatory arrangements on the ground that the provision—
	(a) conflicts with a requirement of a regulatory provision made by the external regulatory body, or (b) unnecessarily duplicates any regulatory provision made by that body."

Lord Kingsland: My Lords, I shall also speak to Amendments Nos. 176B and 176C, which are substitutes for Amendment No. 176.
	During the debate of 23 January, the noble Baroness agreed to consider the principle behind the line of amendments preceding the ones now tabled. They centred on the obligations on approved regulators to co-operate with non-legal regulators over issues of regulatory conflict. In consultation with the Institute of Chartered Accountants, the Government indicated that the wording of Amendments Nos. 176A to 176C might be acceptable. While promoting consumer interests everywhere else, the Bill will put at a disadvantage consumers, providers of services from alternative business structures and indeed legal practices employing individuals with other regulatory obligations by not giving them the same rights to raise issues of conflict.
	The Government's justification for rejecting these amendments is apparently that the general duty is sufficient, but if it is sufficient for conflict between an approved regulator and an external regulator, why not for conflicts between two approved regulators? That distinction appears artificial. The Government, after a degree of prevarication have given the institute an explanation of their decision not to table an amendment to Clause 53. As I have just hinted, that is based on the assertion that the general duty for approved regulators to avoid regulatory conflict is sufficient.
	The provision of legal services is already integrated with many other regulatory regimes. If the Bill is to have the right effect, providing for more flexible and innovative provision, such regimes will become even more integrated. I beg to move.

Baroness Ashton of Upholland: My Lords, I am grateful to the noble Lord for raising this issue. He is right that we have had a detailed conversation with the ICAEW and shared with it our thinking about what we might seek to do and our decision in the end. In all the areas that I have looked at further, I have thought through the policy implications, discussed them with the appropriate people and, where necessary, brought together ideas to see what an amendment might look like. On that basis, we have tried to see whether we would add anything to the Bill or whether, without meaning to, we could create confusion or add burdens.
	Clause 53 places a duty on approved regulators to take account of other regulatory regimes. They are required not only to take steps to prevent regulatory conflict and avoid unnecessary duplication of regulatory requirements but also to provide for the resolution of regulatory conflicts. These duties apply to any approved regulator whose regulated practices include non-lawyer professionals, such as accountants or chartered surveyors. The Bill allows the board to play a role in resolving disputes between approved regulators and external regulatory bodies, provided that the board and the regulators consent and applicable statutory and other provisions allow it. Amendment No. 176A makes that more explicit, but it does not change the policy.
	The amendments do little to help prevent regulatory conflict; Clauses 51 to 54 already provide for that. However, they would place a further burden on approved regulators, who would have an obligation not only to address regulatory conflict with external regulators but also to consider formally and act upon any applications about specific instances. They would increase the pressure on approved regulators, who might be concerned about the possibility of a legal challenge because they had failed fully to address approaches from external regulators. They would apply a potential further statutory burden on the board by requiring it to consider such additional references as may be generated as a result of these amendments.
	One of the key reasons that bodies enjoy the status of approved regulator is that they are judged responsible; that is, as bodies of experience and substance which the Government, in taking forward Sir David Clementi's B+ model, have clearly entrusted with the day-to-day regulation of members of the legal profession. Noble Lords will know that that background is an important aspect of what the Government seek to do. They are responsible bodies, and we expect them to behave as such—they do. We expect that approved regulators would not only want to deal with any cases of regulatory conflict—I think that most, if not all, already maintain comprehensive rules on dealing with conflicts of interest—but they would actively want to avoid or resolve any such conflicts.
	We believe that the duties set out in the Bill are sufficient to encourage approved regulators and ensure that they take a proactive approach to dealing with external regulatory conflict. Having looked very carefully at what this amendment would do, I see no justification for change here. Within the framework that we have set up and with the rules that they will have, these responsible bodies are perfectly capable of resolving these issues. I hope the noble Lord will withdraw his amendment.

Lord Kingsland: My Lords, I am grateful for the Minister's reply. She is reposing great confidence in the general duties, and she may prove to be right. However, she is well aware of the institute's strength of feeling that, if special provisions are not in the Bill, co-operation and avoidance of conflict will not occur. I shall not press this amendment to a vote. We shall simply have to wait and see whether the facts bear out the Government's confidence. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 176B and 176C not moved.]
	Clause 58 [Referral of report by the Secretary of State to the Competition Commission]:

Baroness Ashton of Upholland: moved Amendments Nos. 177 to 180:
	Clause 58, page 32, line 12, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 58, page 32, line 14, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 58, page 32, line 15, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 58, page 32, line 17, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 59 [Duties of the Competition Commission]:

Baroness Ashton of Upholland: moved Amendments Nos. 181 and 182:
	Clause 59, page 32, line 20, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 59, page 33, line 18, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 60 [Secretary of State's power to give directions]:

Baroness Ashton of Upholland: moved Amendments Nos. 183 to 186:
	Clause 60, page 33, line 22, leave out from "The" to "considers" in line 23 and insert "Lord Chancellor may direct the Board to take such action as the Lord Chancellor"
	Clause 60, page 33, line 25, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 60, page 33, line 29, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 60, page 33, line 34, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 61 [The Board as an approved regulator]:

Baroness Ashton of Upholland: moved Amendments Nos. 187 to 192:
	Clause 61, page 33, line 37, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 61, page 33, line 41, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 61, page 34, line 3, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 61, page 34, line 8, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 61, page 34, line 9, leave out "Secretary of State" and insert "Lord Chancellor"
	: Clause 61, page 34, line 18, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 65 [The Board's power to recommend orders made under section 61]:

Baroness Ashton of Upholland: moved Amendments Nos. 193 and 194:
	Clause 65 , page 36, line 38, leave out "Secretary of State that the Secretary of State" and insert "Lord Chancellor that the Lord Chancellor"
	Clause 65 , page 37, line 2, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 67 [Regulatory conflict and the Board as approved regulator]:
	[Amendments Nos. 195 to 199 not moved.]
	Clause 68 [Modification of the functions of approved regulators etc]:

Baroness Ashton of Upholland: moved Amendments Nos. 200 and 201:
	Clause 68, page 39, line 3, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 68, page 39, line 6, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 70 [Carrying on of activities by licensed bodies]:

Lord Carlile of Berriew: moved Amendment No. 202:
	Clause 70, leave out Clause 70

Lord Carlile of Berriew: My Lords, Amendment No. 202 stands in my name and that of my noble friend Lord Maclennan of Rogart. I shall also speak to the other amendments in this group. Once again, I shall not rehearse everything that was said at an earlier stage; there was a robust debate between my noble friend Lord Thomas of Gresford and the government Front Bench on that occasion. However, as we have decided to move these amendments again, I shall explain why.
	These clauses will introduce the so-called alternative business structure, but they achieve two aims that are adverse to the Government's intention in the Bill. First, they will stifle competition where those who espouse competition very strongly—such as ourselves and the noble Lord, Lord Whitty, who I am pleased to see in his place—believe the need for competitive services is greater than anywhere; that is, for people of poorer means and people who live in areas where the provision of legal services is not substantial, such as rural areas.
	Secondly, the introduction of alternative business structures will directly contradict regulatory objective (e) in Clause 1(1); namely the encouragement of,
	"an independent, strong, diverse and effective legal profession".
	I urge the noble Baroness to reread every word of that objective, including "independent", "diverse" and "legal profession". The danger of these structures is that for those who may need them most, who sometimes have the greatest difficulty in enforcing their legal rights or in interpreting their legal obligations, there will be much less of a legal profession available.
	Alternative business structures have considerable attractions. It would be foolish to ignore them. But for whom do they have those attractions? They certainly have attractions for large corporate vehicles, which will wish to invest in using legal disputes as a way of bringing customers into their businesses for other purposes. Supermarket businesses, insurance companies—for example, the car insurance sector—banks and others can readily be foreseen as participants in this market. It is not that they even have to regard legal practice as a profit centre; all they will wish to do is to regard it as a customer centre from which they can earn profits, possibly in connection with legal disputes but certainly in connection with other services they can provide.
	For those living in rural areas it raises the spectre of the destruction of a system that, though not perfect in all its features, has worked pretty well for an extremely long time. In the sort of area in mid-Wales that I used to represent in another place there are, and always have been, small firms of solicitors in market towns, some of them combining together but always providing a choice. One of the things they are able to do with more complex disputes is to say to their clients, "Well, if we do not have the expertise, we will go to someone who does". Those like me and my noble friend Lord Thomas of Gresford, who by coincidence was in the same barristers' chambers in Chester as myself for a number of years, were of course the beneficiaries of that system. That system provides competition at all levels and an expert service which is surprisingly economical when the fees are examined, as they rarely are by some of the greatest cynics. The Bar and, indeed, solicitors are the original consultancy professions. They were there long before this Government and their predecessor turned to consultancy for almost everything.
	What will happen in rural areas is exactly what has happened to the retail sector—the evidence is there. When I first become the Member of Parliament for Montgomeryshire, in the market town of Newtown there were butchers, greengrocers, an excellent cheese shop and an old, established ironmonger. Within a few years a large supermarket chain moved in. The cheese shop closed down 14 days after the supermarket opened. It lost both its custom and its staff to the supermarket. The ironmonger closed not much later, and the best of the greengrocers survived for not much longer. That is what happens when you allow the corporate sector to take over the kind of local services that have served the public well for a long time.
	Alternative business structures are attractive to barristers and solicitors because they know they can move into a large corporate vehicle where they will be cushioned from that often most unwelcome of creatures, the lay client. In normal everyday practice the lay client who comes through the door often has a rankling feeling of injustice; they complain, and they harangue sometimes. The small practitioner puts up with it, deals with them and usually finds a way of satisfying them, even if it is to say, as honest practitioners often do, "I am sorry, there is absolutely nothing I can do for you". They will be replaced with call centres. The lawyers will be attracted by the idea that they will deal only with the most important issues placed before them. They will be able to make policy decisions which will brush aside small housing cases, cheap divorces, small crime, small personal injury claims and so on. The public will be driven to ringing up call centres, which will offer unqualified persons giving poor advice. There is the clearest evidence that that is what the market will produce because it has already done so in many other sectors.
	The experiment with alternative business structures, unless it is extremely carefully piloted and market-tested, is therefore unlikely to do anything but damage. It may be said, "Oh, well of course in rural areas there are the citizens advice bureaux", but citizens advice bureaux, although they are very good organisations, depend almost entirely on the voluntarily given expertise of those very lawyers who will disappear from local communities if alternative business structures are allowed to take hold.
	Alternative business structures are attractive to lawyers for other reasons. If you take the analogy of another fee-earning industry, the advertising industry, decades ago advertising agents ran, rather like barristers and firms of solicitors, small collegiate structures with a few people earning fees. Then they got the idea of going to the market, and, suddenly, we have multi-billion-pound companies that produce capital advantages for their senior partners and players. Exactly the same would happen to the legal profession. I can see enormous advantages for those of us in the profession in turning our barristers' chambers or firms into corporate vehicles. We might even take over the supermarkets in due course as a result of the capital we would raise in the market. Rather like undertakers, we are certain to have business as the years pass because legal disputes always occur. I cannot see how that would aid the competition, much as many lawyers would like to turn their modest share in their office or their barristers' chambers into a few million pounds' worth of shares. It cannot be in the public interest to do so.
	Along with, for example, the Legal Action Group, which certainly has legal consumers' interests at heart, the Legal Aid Practitioners Group and the Solicitor Sole Practitioners Group, we have taken the view that these provisions are anti-competitive and likely to destroy a significant part of the profession if not extremely carefully controlled, hence our opposition to them. I beg to move.

Lord Whitty: My Lords, I recognise some of the anxieties that the noble Lord, Lord Carlile, points to. However, it is certainly the view of most consumer organisations that there should be some flexibility in the provision of service and in combining different services that are related in terms of the consumer experience, particularly those that involve buying and selling property and other transactions that require not only a lawyer but a lot of other areas of expertise, which could be brought together.
	The noble Lord seems to think that the movement would all be one way. Apart from what he said in his last remarks, he sees Tesco taking over legal practices. But actually many of these solicitors in small towns will be able to expand into providing multiple services to consumers in a one-stop shop. They will be in a far better place than the supermarkets or even the estate agents in so doing. In his earlier remarks, the noble Lord failed to recognise that we are not plunging into a completely free market. This is a regulated, licensed introduction of an alternative business structure, which still has legal standards and professionalism at its heart, but which brings those services to the consumer together with other related services that the consumer may well want.
	I do not regard the Bill as allowing completely free rein to establishing an alternative structure to the present ring-fenced legal professions. However, I recognise that the entrepreneurship of legal professionals could well be stimulated by that possibility, as well as by other businesses and services combining and enhancing the services that they offer to the public by bringing legal professionals into their role. From the consumer point of view, with a one-stop shop and the ability to cross-refer between the various professions with which you have to deal, especially in relation to property transactions, which, are, after all, the biggest financial decisions that people make in their lives and the largest use that most people make of lawyers, there is obvious synergy in providing through the alternative business structure.
	There are safeguards in the regulatory structure; indeed, there are more safeguards in the responsibilities on the licensing authorities, which are to be debated in later government amendments. So the dire picture that the noble Lord presents is wrong. We certainly should not dive into this without safeguards but, on the other hand, I can see enormous benefits for consumers in introducing this degree of competition and stimulus to innovation in providing such services.

Lord Kingsland: My Lords, I have a great deal of sympathy with what the noble Lord, Lord Carlile of Berriew, said about Part 5. We have serious concerns about the impact that the licensing provisions may have on the provision of legal services in rural areas and in many large industrial towns. That is why we place great weight on Amendment No. 252, which would ensure that when the approved regulators—and, where appropriate, the LSB—address the issue of licensing, they give significant weight, as the planning legislation sometimes says, to the access to justice objective.
	In all other respects, I am aware that the noble Baroness has sought to emphasise that the question of weighting is entirely a matter for the Legal Services Board, but I believe this to be a vital exception. That is particularly true in the provision of external capital to legal services. It would not be surprising if, at the end of the operational year, the investor had a careful look at the profitability of the various types of legal activity in which the firm in which it had invested engages. If it finds that some activities are more profitable than others, it will inevitably require the firm to put more resources into those areas in future. The kind of services vital to rural areas and large industrial towns are often those provided to the less well-off consumer.
	If a large number of legal firms attract outside capital, the predictions made by the noble Lord, Lord Carlile, are likely to come true. I recall that, in Committee, the noble Lord, Lord Whitty, who has not always been on my side in our debates, expressed some hesitation about the absence of special access to justice provision in this part. I do not know whether that will mean that he will go as far as supporting Amendment No. 252, but he is clearly thinking very hard about what is the appropriate government approach.
	Although the noble Lord, Lord Neill of Bladen, has not intervened at this juncture, the noble Baroness will doubtless be aware that he has tabled, at the end of the Bill, what might be described in effect as a sunrise clause. In that context, the noble Baroness will recall the long debate that we had about the importance of monitoring ABSs in their early phases to see whether their effect is as beneficial as the Government predict. She will not be surprised to hear that we believe that some sort of legislative cocktail involving our Amendment No. 252 and the sunrise clause amendment tabled by the noble Lord, Lord Neill of Bladen, is the right approach to Part 5. The uncertainties are great. I hope that the noble Baroness will not underestimate some of the graphic illustration in the predictions of the noble Lord, Lord Carlile of Berriew; if only some of those predictions come true, the government experiment will prove a disastrous failure.
	In principle, after careful consideration, we are not inclined to expunge Part 5, provided that either some combination of our amendment and that of the noble Lord, Lord Neill, is accepted or the Government come up with an equivalent solution.

Lord Campbell of Alloway: My Lords, in the questions to those who gave evidence to the Joint Committee, I raised a series of problems from my experience when I was, in a sense, part of a similar set-up in Brussels. I will not go into details, but it related to the retention of one's independence as a member of the Bar when in a business relationship of sorts with accountants.
	I am very worried about this, for the reasons recorded, which I shall not express again, concerning the independence of legal advice and, hence, its quality. Therefore, I go along with my noble friend Lord Kingsland. I do not feel that I am in a position to expunge the clause, but I am worried. I would like an effective monitoring system—not a licensing arrangement at large, but one that is controlled by statute—and, perhaps, a pilot scheme. I entirely recognise the terrors expressed by the noble Lord, Lord Carlile of Berriew, but that is the world in which, somehow or other, we must live.

Lord Neill of Bladen: My Lords, reference has been made to an amendment that I tabled, with the subsequent backing of other Members of the House, which is a long way down the batting list at No. 637A. Those who followed our debate in Committee may recall that I spoke about Part 5. I do not think that the noble Lord, Lord Whitty, was there, but I picked up from what he had said earlier a worry, from a consumer point of view, about access to justice. I certainly quoted the views of the noble Lord, Lord Carlile of Berriew, and of his colleague, the noble Lord, Lord Thomas of Gresford. The noble and learned Baroness, Lady Butler-Sloss, who is no longer in her seat, expressed fears about access to justice in the West Country. Suffice it to say today that I am looking forward to the opportunity to present that amendment.
	Naturally, I sympathise with many of the statements of fact and projections that have been made by the noble Lord, Lord Carlile. In essence, we are rushing into this on an inadequate basis of fact, testing and research. As a House of this calibre, we have no right to be doing this without trying to inform ourselves very much better than we are informed today. I know that the Minister will say, "Ah, but I have sent you a lot of books since then". It is certainly true: there is a stack of papers starting with papers from Sydney, New South Wales, from the Commission in Brussels and—a little nearer to home—from learned professors and so on. It is very good for me to read all this, or part of it, but the projections made by the noble Lord, Lord Carlile, about what may go wrong are very telling, and I shall return to the theme later.

Baroness Ashton of Upholland: My Lords, I am grateful to noble Lords who have spoken. In Committee, we had useful and important debates on issues that were clearly of great importance to your Lordships. I share the concern. We talked a lot about rural communities in the context of previous experiences, and mentioned the corner shop and the post office. My noble friend alluded to the fact that Part 5 might provide opportunities for small practices to expand to enable them to survive more effectively in rural communities. That is certainly our ambition. We have also talked a lot about access to justice. We will, I hope, consider that more fully when we discuss later amendments. Monitoring is also very important. As the noble Lord, Lord Neill of Bladen, said, he has tabled an important amendment relating to monitoring.
	I shall focus entirely on the effect of removing Part 5, which the amendment would do. I shall not pretend that I am not disappointed to see that the amendment has returned, because one of the important aspects of our deliberations in Committee was, I felt, that noble Lords were trying to improve, rather than remove, Part 5. We talked at enormous length about the opportunities that Part 5 could give to providers and consumers and I thought that some noble Lords felt that we should encourage that as long as—this is critical—the appropriate safeguards were in place. The noble Lord, Lord Kingsland, is entirely right that my noble friend Lord Whitty shared his concerns about ensuring that those safeguards were in place.
	My ambition is therefore that we should discuss those safeguards and take note of the way in which the Government have sought to address them. That will enable me to explain what we have sought to do and noble Lords to move their amendments and to have that very important debate. If we remove Part 5, we do not prohibit alternative business structures. We inhibit their development, for sure, but we do so without establishing the important system of regulatory safeguards in the legislation to ensure that this develops properly. Noble Lords know that limited forms of alternative business structure practice will be able to continue to develop under the existing framework. Section 66 of the Courts and Legal Services Act makes it clear that nothing in the Solicitors Acts, the notaries Acts or common law prevented solicitors, notaries or barristers from entering into unincorporated associations with other people or restricted the circumstances in which they might do so.
	Current protections are not enough. It is right and proper to develop alternative business structures, but it must be done within a proper regulatory framework to ensure that we have competition and greater innovation to the benefit not only of the consumer but of the legal services sector. We want to do that in a structured way that enables us to protect the consumer and the legal profession. We know that a healthy supplier base is absolutely essential to the provision of legal services and to achieving the objective of improving access to justice.
	We also know that many legal professionals do not fear competition: quite the opposite. There are tools in Part 5 that will enable them to respond to changes in legal services and the business environment and to competition from new entrants into the market. They can use them to provide even better services to clients, which is at the heart of what the noble Lord, Lord Carlile, said he wished to achieve. I know that he wants to ensure that the quality of service provided to clients is of the highest order and the right calibre, hence the rather gloomy picture that he paints. I understand why he does not want the legal profession to lose face-to-face contact and the ability to talk to the client to give the best advice and to have that replaced by some remote structure, which he described by alluding to the call centre experience that he has had.
	We want to achieve nothing other than better legal service. We do not want to do anything that will prevent rural communities from getting the best possible services. I do not think that the noble Lord intends this, but removing Part 5 could stifle innovation and prevent change. We believe that there is quite a lot of welcome, cautious though it may well be in part, for what might be achieved through alternative business structures to ensure a higher quality of services, a strong and vibrant legal profession, and good advice and support to consumers.
	I therefore hope that the noble Lord will allow Part 5 to remain on the basis that noble Lords have quite reasonably wished to ensure that we have the right safeguards in place. I very much look forward to debating those later in our consideration of the Bill.

Lord Carlile of Berriew: My Lords, the Minister has replied helpfully in her customarily persuasive and courteous way, but I am afraid that we feel totally unpersuaded by what she has said. There is already a competitive market. We fear that the competition in that market will be removed. There is nothing that good lawyers like less than seeing legal work done badly. We believe that, despite the safeguards that are set out in the Bill and in the schedules, and indeed in the amendments that have been so helpfully tabled by some of those who have spoken eloquently in this short debate, we will be left with a situation in which the quality of legal services will diminish.
	The Minister spoke of the existing possibilities of lawyers entering into unincorporated associations with one another. That is certainly possible now, but it is a very different professional picture from one in which there are very large incorporated organisations with a very large profit element to them. I say to the noble Lord, Lord Whitty, who spoke constructively to this amendment, that flexibility already exists, but the evidence is that what has been produced is not that good.
	In the very large-scale market in personal injury cases, for example, we have seen more litigation with less merit. We have seen significant corporate fraud in the way in which cases have been obtained by corporate vehicles that have placed themselves in that market. Those of us who have been in the profession for a long time have also seen the unseemly picture of commercial organisations persuading people who have been injured in accidents to go to them, but then selling the cases, at a fee per case, to solicitors who then conduct them. I do not understand how that improves the competitive environment for consumers.
	We on these Benches therefore feel intense disappointment that Part 5 remains so unmitigated in the Bill. Accordingly, we wish to test the opinion of the House.

On Question, Whether the said amendment (No. 202) shall be agreed to?
	Their Lordships divided: Contents, 48; Not-Contents, 116.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Evans of Temple Guiting: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion, I suggest that the Report stage begin again not before 8.20 pm.

Moved accordingly, and, on Question, Motion agreed to.

Health: Doctors and Patients

Lord Turnberg: rose to ask Her Majesty's Government what advice they will seek in formulating their response to the Chief Medical Officer's report, Good Doctors, Safer Patients.
	My Lords, now we have the Government's response, it might be thought that this Question, which I put down some time ago, is somewhat redundant, but I believe I am not too late because the White Paper leaves open the prospect of much further consultation on the ways in which it might be put into practice. Thank goodness for that, because there are some areas of uncertainty which give rise to concern. I am going to concentrate on the proposals as they affect the General Medical Council, and I declare my interest as a former dean of a medical school, past president of a medical royal college, a one-time member of the GMC and currently president of the Medical Protection Society. In all those roles, I have strived to raise the standards, quality and safety of the care that patients should expect to receive from their doctors. So it should be clear where I am coming from when I say that I wonder whether the Government have got it quite right.
	Let me try to put the White Paper into perspective. Here I reflect exactly what the Secretary of State says in her foreword:
	"It is all too easy to focus on the incompetent or malicious practice of individuals and seek to build a system from that starting point instead of recognising that excellent health professionals far outnumber the few who let patients down substantially".
	She goes on to say:
	"Most health professionals meet high standards routinely and have a lifelong appetite to be even better. That professionalism is an unquantifiable asset to our society, which rules, regulations and systems must support, not inhibit".
	Unfortunately, what follows falls somewhat short of those sentiments, yet the facts entirely support her statement. Over 1 million patient/doctor interactions take place each day in primary care alone, and every MORI poll shows high levels of trust in doctors by their patients. The most recent poll undertaken in 2006 showed that 92 per cent trusted their doctors. I hesitate to compare this with public trust in politicians or journalists, so I am not going to embarrass my noble friend, but it is considerably lower. I am afraid that this is a political reaction to journalists' reports of the infrequent scandals which do occur and may have driven the way in which parts of this White Paper have been drafted. Unlike patients who largely trust their doctors, the White Paper gives a clear impression of mistrust.
	Of course we have to protect patients from bad doctors, but we have to be sure that the right balance is struck between protecting the public and being fair to doctors, and I am not sure that we have got it quite right. Despite that, I have to say that there is much which is helpful and deserves support: the GMC continuing to oversee undergraduate medical education is very welcome because it does a good job and should continue to do so; and the introduction of a formal system of revalidation for doctors is also welcome. The fact that the colleges will have a leading role is important. They have been heavily involved for some time in developing systems for regular appraisal, and while they will need time to develop the robust systems required, this too is a very important development. The separation of the investigative and judicial functions of the GMC is an important principle, although it should be pointed out that the GMC has for some time had independent adjudicating panels without any members of the council itself sitting on them. All this is reasonably positive, especially as they all build on existing activities and make them more formal and obvious to everyone.
	But we are left with a number of problematic aspects, and I shall concentrate on just two. First, the effect of the rest of the paper is to introduce a much heavier bureaucratic and, I fear, oppressive regulatory burden. It is worth mentioning here that in the UK we have one of the most over-regulated health systems in the world. A recent publication by the NHS Confederation complains bitterly that there are more than 57 regulatory and inspectoral bodies which attract enormous costs not just to run themselves, but also in the time and effort that trusts and doctors have to put into responding. Against that background, the White Paper suggests that we need not only to enhance the role of medical directors to include the monitoring of doctors in their patch and to introduce GMC affiliates at regional level to monitor those medical directors—although it is not yet entirely clear what their role will be—but also strengthening the role of the Council for Healthcare Regulatory Excellence, a body set up to monitor the activities of the GMC and the other bodies, presumably because they cannot be trusted.
	In addition to all that, two further new levels of regulation are proposed, the first being regional medical regulatory support teams. They are called support teams, but their proposed membership suggests a heavy employer basis set up to exert control of medical directors and GMC affiliates. These teams will also keep a check on the way the colleges undertake the revalidation exercise—they will "quality assure" it. While it is unclear where they will get the expertise to do this, it does suggest that no one trusts anyone to do their job, and all at considerable expense and the loss of a sense of responsibility on the part of individuals as they hand over their professionalism to yet another body. The second level of regulation is another body at the national level, a "national advisory group" whose role and responsibilities are unclear and the need for which remains uncertain.
	I would ask the Minister to look critically at the ways in which we might fulfil everything needed to ensure high-quality and safe care for patients without introducing such a seemingly heavy-handed and complex bureaucracy to achieve it. Do we really need all these bodies to keep a check on the others?
	Finally, I want to spend a moment on the vexed question of the standard of proof. The White Paper proposes that the standard of proof in adjudicating on concerns about a doctor's performance should be lowered from the current criminal standard to a civil standard of proof; that is, one based on the balance of probability. It is proposed that the civil standard should be applied "flexibly" and on a sliding scale dependent on the seriousness of the case. Here I have very real concerns. When I see the word "flexible" applied to the law, I worry, because it leaves open the potential for considerable inconsistencies between similar cases in the judgment of the panels. Furthermore, the words "sliding scale" evoke an image of a slippery slope. We are considering here the potential to deprive a doctor of her or his livelihood and leaving them with an indelible stain on their character and reputation. Of course we must protect patients and remove dangerous doctors, but one wants to be pretty clear about the safety of judgments. A low standard of proof leaves open the real risk of miscarriages of justice.
	The White Paper recognises the problem in suggesting that a higher standard of proof will be required when allegations are more serious, but putting this good intention into practice is so dependent on the training of the judging panels and on their ability to be consistent that it is difficult to see how it will work fairly and justly for both patients and doctors. The costs and burden to everyone of a system which seems so loosely drawn up must be a cause for concern, and I ask my noble friend to take this back and at the very least see if he can think of ways in which the system might be made to work consistently and fairly, perhaps by piloting it in some way.
	There are many other aspects of the White Paper which I am sure other noble Lords will cover in the enormous length of time in which they each have to speak, but I finish by pointing out that it was the Shipman affair which precipitated much of this work. While Dame Janet Smith's report failed to throw up any suggestion that the GMC had itself behaved wrongly in any way, we have to ask ourselves whether the proposals in the White Paper would deter a determined murderer who happens to be a doctor. Unfortunately, I rather doubt it. This is an opportune moment to look at what should be done to improve the care and safety of patients, so I welcome the White Paper. But it will be vital to ensure that in the consultations we are now promised, we are able to make it work effectively and, most important, proportionately on the problems we are seeking to resolve.

Lord Colwyn: My Lords, I congratulate the noble Lord, Lord Turnberg, on securing this important debate and giving us the opportunity to help advise the Government on their response to Sir Liam Donaldson's report. I declare an interest: I am both a fellow of the British Dental Association and registered with the General Dental Council.
	The British Medical Association has described the Chief Medical Officer's recommendations as a missed opportunity that has failed to harness the medical profession's enthusiasm for change. The Government's response sets out a programme of changes to the UK's system for the regulation of health professionals. Sadly, the proposals add up to the loss of professionally led medical regulation.
	Professional regulation is a complex area and time is short, so I will limit my remarks to two broad areas. First, there is the critical nature of the four interlocking functions of healthcare professional regulation. Any future Bill put before this House should support the role of regulators in maintaining a robust and accessible register of practitioners, in having a key role in setting the standards for practice and supporting educational standards and in dealing with registrants whose performance consistently or seriously falls below acceptable standards. Any significant fragmentation of those roles would be to the detriment of patient safety. I therefore welcome the importance the White Paper attaches to proper co-ordination and coherence across those interlocking functions.
	The second issue is that of the mobility of healthcare practitioners across borders, particularly within the European Union. Sir Liam Donaldson's report and the subsequent White Paper both raise the issue of communications skills and language competency. While I recognise that there may be limits under European law for blanket language testing of health professionals from the EEA, I am not sure that the White Paper's response deals with the issue sufficiently. Placing responsibility for language testing on NHS employers may be one part of the solution, but that fails to deal with the large numbers of healthcare professionals who operate outside the NHS or in a self-employed environment where the risks to patient safety may be the highest. I should be grateful if the Minister could clarify this in his reply.
	Three minutes is not long enough to comment on these important changes. The White Paper states that the Government will publish a detailed implementation programme. Primary legislation is expected in the next parliamentary Session, although some of the proposals can be implemented through secondary legislation. I hope the Minister will be able to provide details of the timing of the publication of the implementation plan and details of the groups that will have to be set up to give careful consideration to this wide range of changes.

Baroness Emerton: My Lords, I thank the noble Lord, Lord Turnberg, for introducing this debate. I declare an interest in that I was chairman of the United Kingdom Central Council for Nursing, Midwifery and Health Visiting and chaired the professional conduct committee. I was also a lay member of the General Medical Council and a member of its professional conduct committee.
	The Nursing Midwifery Council is the UK regulator for two professions: nursing and midwifery. The primary purpose of the NMC is protection of the public. It does so through maintaining a register currently standing at 685,000 registrants. The NMC and the GMC both accept the recommendation in the White Paper of moving the standard of proof from criminal, beyond reasonable doubt, to the civil standard, the balance of probabilities. The BMA and the RCN are opposed to the change. Speaking from my personal experience, I would have found it very difficult to make a judgment under the civil standard when considering the future of a practitioner in relation to safety to the public, as well as to the possible loss of livelihood for the practitioner. I realise that the White Paper is suggesting a sliding scale being applied to the civil standard, but surely such an important decision should be based on "beyond reasonable doubt"; that is, a certainty on what has taken place rather than "more likely than not", while at the same time safeguarding the presumption of innocence of the registrant. The suggested sliding scale is permissive and would give the adjudication panel discretion on how to deal with a particular case. That would create uncertainty for all parties concerned. If the sliding scale were to be introduced, there surely would need to be supporting regulations to provide definitive guidance to all parties.
	The White Paper sets out the process for an appeal on the decision of the adjudicating committee; that is, that an appeal will be heard in the High Court. If the adjudicating panel has the status of a court, it surely cannot be right for another court of first instance to hear an appeal. At present, in the civil system, an appeal from either the county court or High Court goes to the Court of Appeal. Surely the adjudicating panel should be on a par with a court of the first instance. Why are Her Majesty's Government recommending downgrading the appeal from the referral to the Judicial Committee of the Privy Council to a court of the first instance?
	The White Paper proposes an implementation plan. Meanwhile, the current regulating bodies must continue their functions effectively and efficiently, while at the same time preparing for the changes. I bring two concerns of the NMC. In the spring of 2008 an election has to be held for the English council members, at a cost to the registrants' fees. Should the new organisations be in place in 2008, the newly elected members would be redundant and the registrants not amused at their fees being used in this way.
	Another concern is that the advanced nurse practitioners are currently practising without the protection of a register to the public and the practitioners themselves. Her Majesty's Government have indicated that the council will be able to press ahead with a register. Is it not possible to bring forward permission for the council to open a supplementary part of the nursing register when so many advanced techniques are being carried out without protection to the public or the practitioner?

Baroness Jones of Whitchurch: My Lords, I welcome the opportunity to contribute to this debate and to echo the emphasis of my noble friend on the need for wide consultation on this important issue. Some recent disturbing high-profile cases have underlined once again the need to put patient confidence and patient safety at the heart of the governance of the medical profession, but in the necessary push for reform we should also bear in mind that our current medical training and regulatory regime is respected as a gold standard internationally, the overwhelming majority of doctors are dedicated to providing high-quality patient care and patients continue to report high levels of trust in their doctors. This is not a plea for complacency; far from it. It is right that the GMC regularly initiates its own reform agenda as well as welcoming external review. But it is a plea for reform to be proportionate and substantiated.
	I declare an interest. I am a member of the GMC's fitness to practise panel, and I have sat on a number of disciplinary cases over the past year. That experience has provided an interesting contrast with my previous career as a trade union official, where for many years I championed employment rights and represented cases at employment tribunals. I have found the difference in the quality of the experience compelling. In particular, I have been impressed by the meticulous care taken to ensure that fitness to practise panels operate in a fair, transparent and independent manner. The panel selection process, the training, the care taken to assemble the cases, the conduct of the hearings and the review and feedback mechanisms have been refined over many years and are, to my mind, of enviable quality. The overarching principles in good medical practice and a commitment to patient safety cross-reference every stage and every decision. That is not to say that every decision is perfect. Even with the most professional system in the world, human beings are still fallible. In my experience, however, the current GMC culture faces up to those issues and learns from the mistakes, and surely that is the most important response.
	I remain concerned that the report proposes a separation of the investigation and adjudication functions in fitness to practise cases. I acknowledge the superficial attraction of adjudication being undertaken by independent tribunals, but fear that the reality would be less expertise, less consistency and less trust in the process. A change of this importance should only be contemplated if the outcome will deliver better quality decisions, seen to be in the public interest, and I do not believe that that case has been made.
	Finally, I should like to say a few words on the proposals for local GMC affiliates. Clearly more needs to be done to ensure that professional standards, set nationally, are applied consistently at a local level. But my concern is that the concept of GMC affiliates will concentrate responsibility for local standards in too few hands. Putting it bluntly, it lets everybody else off the hook. The solution to high standards of clinical governance has to rely on good-quality training for medical and non-medical staff, emphasising personal responsibility, and strengthening the employment role of trusts and medical employers.
	I urge consideration of phased reform in these areas, with a period of evaluation, before contemplating more complex and, some might say, more bureaucratic changes.

Lord Patel: My Lords, I, too, thank the noble Lord, Lord Turnberg, for securing this debate; of course, it would have been better to have had more time.
	Much of what I have to say has been covered by the noble Lord, and I agree that there is a clear need for further elucidation of how many of the recommendations would work in practice. However, I am pleased that patient safety is central to all the proposals in the White Paper. But then, I would say that, wouldn't I? I am the chairman of the National Patient Safety Agency. While I am at it, I might as well declare my previous interests, relating to colleges, the GMC and educational authorities.
	I have some concerns, not about the proposals but about how clear, crisp legislation can be drafted on recommendations on affiliates, information-sharing and rehabilitation, for example. Who would the affiliate, as a local regulator, be accountable to? Could there not be a potential conflict of interest? How will she or he work across various NHS and private sector providers of care? Hard regulatory information about an individual practitioner is relatively easy to legislate for, but softer information and its sharing is much more complex. The questions are how and when the work will be taken forward, and who by.
	I welcome the proposals on rehabilitation for health professionals who get into difficulty. This is a proper way forward and a modern approach to workforce management. We already have a framework developed by the National Clinical Assessment Service—part of the National Patient Safety Agency—to take this forward. In my view, it does not require further legislation. What is being done to do this and, importantly, how will it be resourced? For example, over the past three years about 500 doctors have been referred to the National Clinical Assessment Service for further evaluation. If revalidation and recertification throw up the same percentage of doctors—about 3 per cent to 5 per cent—the resources required would be considerable.
	The briefs that we have received, particularly from the GMC and the BMA, differ in their perception of how this will work. However, my view is that revalidation, recertification and appraisal work, which will now form the statutory responsibilities of the colleges, is the right way forward. The colleges will have to recognise that they will have to produce, as the noble Lord, Lord Turnberg, said, a robust system that can be tested and that they have to be accountable. I hope that they will address that. In my role with the National Patient Safety Agency, I will look to see that patient safety is embedded thoroughly in all the proposals.

Baroness Masham of Ilton: My Lords, there is nothing more important for patients who need a doctor to have one who is good, gets the diagnosis correct and sees that the patient has the appropriate treatment and care. Years ago, when I was a member of the Yorkshire Regional Health Authority, I was invited to open a GP surgery in South Yorkshire, which I did. Recently I was told that Dr Shipman had worked there. I shuddered. Doctors are usually trusted members of their community, doing the best for their patients, not killing them.
	Last week a physiotherapist told me that she had heard of a very disturbing incident recently. A lady, living in a rural village in North Yorkshire, who did not have family support and was an amputee, had serious diarrhoea and vomiting. The GP visited. The women had only an informal carer. No care plan or professional nurses were arranged. When the GP had not managed to improve the situation and the patient was deteriorating, the informal carer bundled her into her own car and took her to the local hospital. The hospital staff were horrified when they found that she was dangerously dehydrated. She died soon afterwards. Many people are concerned about this case; they wonder what has been written on the death certificate and if there will be an inquiry. She was a lady in her 50s.
	I am pleased that the General Medical Council, in its submission to Sir Liam's review, has identified as one of its priorities greater patient and public involvement and easier access for patients and employers for information about their doctors. I hope that voluntary organisations representing patients in different ways will be able to help the Government in their response to this. With so many upheavals in the National Health Service and many doctors becoming disheartened and complacent, there need to be clear pathways of communication so that vulnerable patients receive the correct treatment and care.
	When I was a member of the family health service authority in North Yorkshire, we knew how difficult and slow the procedures were in dealing with doctors who could put patients in danger. Two particular cases come to mind—one concerns a serious drug addict and the other an alcoholic. There can be a serious problem of young doctors drinking too much and becoming alcoholic in later life. There is also the difficult situation when depression and mental illness present. I hope that the dangers of such risks will be taught to medical students, involving their patients and themselves. This is an important subject—the safety of patients should always come first.

Baroness Murphy: My Lords, a patient of mine, a retired plumber in Deptford, once said to me, "I suppose doctors are like plumbers—a third good, a third average and a third you wouldn't want anywhere near your drains". We might argue about the percentages, but most doctors would acknowledge that there is some small truth in the wisdom of the plumber in Deptford.
	The public want us to take action to address their concerns about the quality of healthcare. We should support any endeavour to improve lifetime professional practice. Liam Donaldson's report achieves about the right balance between heavy-handed regulation and the developmental supportive approach, which may not be popular with all my colleagues. How the Government respond to that by putting in the bureaucratic processes and systems to support it, I am not sure has been fully worked out.
	I declare an interest as chair of council at St George's, University of London, which has a medical school. I want to comment on aspects of medical education. First, I strongly welcome the proposal that the GMC's judicial hearings should accept the standard of proof of the civil courts; I welcome the flexible approach. As an NHS manager, I was obliged to welcome back many colleagues who I was pretty sure would get their comeuppance from the GMC, only to have the case fail as a result of inappropriate standard of proof. I was then faced with the horrible disciplinary dilemma of the doctor coming back to the trust without having a proper way to deal with it. The standard of proof is inappropriate. It is crucial that we create a system whereby the GMC system of regulation is more closely related to the local disciplinary processes and support systems within the trusts. Although the new affiliate system may become over-bureaucratised, it is, in principle, a good way to achieve that.
	I support recommendation 23 that students should be registered with the GMC and the proposal for new GMC affiliates on the medical school staff to operate fitness to practise in parallel with the system for registered doctors. However, in view of the fact that expertise in these matters is not easy to come by, regional teams of affiliates with real experience of issues could build up expertise within medical schools. That might be preferable to multiple local affiliates.
	These issues need sympathetic and careful handling. A first-year student's problems and bad behaviour may be acceptable in the first year, but not in the final year. We need to develop sympathetic systems to look at fitness to practise in medical students. Overall, I welcome this report and look forward to the Government's further responses.

Lord Walton of Detchant: My Lords, we are in serious danger of living in a grossly over-regulated society. There is no doubt that the Government have inadvertently slipped into a situation of developing an almost intolerable quangocracy in the healthcare field. As the NHS Confederation said, 56 organisations capable of inspecting and assessing behaviour in the health service is far too many and has caused serious damage to professional morale. It has also taken away from the bedside and from patient care many people who could have been devoting their time much more effectively.
	I speak as a former president of the General Medical Council. Many things in the CMO's report and in the White Paper that followed should be welcomed but, like others who have spoken, I recognise that the high-profile cases that have received so much attention in the media dented public confidence in the profession for some time. Nevertheless, as the noble Lord, Lord Turnberg, said so explicitly, survey after survey of patient attitudes has demonstrated that they hold the medical and nursing professions in the highest possible esteem and trust them implicitly.
	I now turn to one or two points in the CMO's report and the White Paper. First, I wholly accept that the GMC in the future will be made up of at least equal numbers of lay and medical people. I also accept that members of the council should be appointed by an independent process which must be independent of government after full consultation with all interested parties. However, like others, I am concerned about the flexible standard of proof. There is a very real risk that with clever lawyers arguing cases, the flexible standard of proof on the balance of probabilities may lead to serious injustice.
	Like the noble Lord, Lord Turnberg, I believe that the role of the colleges in revalidation and in licensure will be vital to the future of the medical profession. If they do that job properly in collaboration with the GMC, I see no need for the continuation of the National Clinical Assessment Authority, just as I am concerned that we have Big Brother in the council for the regulation of the health professions overseeing the activities of the regulatory authorities—Big Brother looking over the shoulder of Big Brother. I am not certain that that whole process should continue.
	Turning to fitness to practise, it is absolutely clear that the GMC, in its recent activity, has separated the fitness to practise panels totally from membership of the council and that process should continue. It will give the council and the public confidence that doctors will be handled compassionately but at the same time firmly if they are not up to the standard that the health professions should require.
	The time has come for the Government to undertake a period of calm reflection and consideration. The White Paper is like a curate's egg: it is very good in parts. But the Government must, in future consultation, carry responsible medical opinion with them in proceeding with this programme of reform.

Baroness Finlay of Llandaff: My Lords, I, too, thank the noble Lord, Lord Turnberg, and declare that I am registered with the GMC. The foreword to Good Doctors, Safer Patients points out,
	"that excellent health professionals far outnumber the few who let patients down substantially".
	How true that is. Reform must command the confidence of doctors and patients alike, so regulation must be truly independent of government and interested parties yet encompass the expertise to assess complex issues.
	Revalidation processes must be fair and consistent throughout the UK because there are variations in clinical governance, structures and appraisal systems, particularly in primary care, and diverging health structures are increasingly emerging throughout the four parts of the UK. Revalidation must be flexible to cope with different work settings and career paths, including those outside ordinary clinical medicine.
	The engagement of the royal colleges will be crucial in holding the confidence of the profession. The task of the GMC in co-ordinating all stages of medical education is a welcome step towards that. But can the Minister clarify when local NHS systems throughout the UK might be ready to deliver what will be required of them? As professional mobility increases, non-UK graduates who practise medicine here must be subject to the same level of regulatory scrutiny as UK graduates: the standard must be the same.
	The disciplinary elements are of concern. If the standard of proof is to be applied flexibly, the profession will seek the assurance that the criminal level of proof will be required to strike a practitioner off the register, whereas the civil level of proof will be used to guide retraining.
	My last point is about recorded concerns. The danger is that recorded concerns will push doctors into defensive practice. Sometimes, it is in the interest of the individual patient to take a risk. We already have clinical hesitation at times, driven by defensive practice. A vexatious complainant or another member of staff who bears a personal grudge may seize on an action that is a valid patient-orientated decision, but falls far outside the current guidelines or protocols. I fail to see how that doctor is guaranteed a fair hearing and without being confident of a fair hearing, human nature is to veer on the side of precaution, stick within the protocol and, in the process, deny a patient. Patients are complex individuals, but guidelines and protocols are written for an average and can be too rigid. A very specific example is that it is now almost impossible to get an epidural put into a patient in pain at home, whereas some years ago it was easy. It is such un-standard practice that anaesthetists will simply not undertake it.
	Overall, the intention of the documentation is good, but the proposed system is complex and proposals such as affiliates may eventually work against some patients with complex and unusual needs.

Baroness Barker: My Lords, I, too, thank the noble Lord, Lord Turnberg, for this brief opportunity to address these issues.
	My principal concern is that all the inquiry reports that have led to the report by the CMO have put forward many different proposals—some will please some professional bodies and others will not. The one thing that the Government have to do, at a time when healthcare provision is becoming increasingly disparate and diffused, is to provide a coherent basis for systems of quality assurance, evaluation and regulation that are consistent, robust and readily understood. The central problem is that the Government's response is being diffused over a number of different pieces of legislation and many different bodies, such as some of the new bodies that have been put forward. It is not clear where responsibility will lie for the oversight of consistency of standards.
	Last year noble Lords spent some time looking in detail at the NHS redress system, yet the proposals in this report go in a completely different direction from the case that the Government were arguing on complaints in the NHS. In practice, that is bound to create a difficulty for practitioners and regulators.
	The further set of proposals—and the Government's response to what happened with Dame Janet Smith's report—will be contained in the legislation on the review of the coroners' courts and the coroners' system. Let us remember that at the heart of the Shipman case was a doctor who was an excellent communicator and had enormous personal standing in his community—I know because friends of mine lived there—and that there was a failure in the notification system around death certificates. That is why so many murders went unreported for so long. It is tremendously important when dealing with bad and criminal practice that the proposals from the Government and the GMC are consistent with that, and that it is possible to see how those two systems work together to guarantee patient safety in the worst cases.
	Running throughout these reports is a consistent argument that doctors need to be able to communicate better with patients. Bad doctors can sometimes communicate extremely well; that is how they get round the system. What is never made clear in any of these documents is what the nature of that communication should be and how patients will be enabled to spot bad practice. I simply draw to your Lordships' attention that patients' forums are yet again to be reorganised. They are an important mechanism by which the public gain the technical knowledge to make assessments of healthcare.
	It is not that there are not good proposals in all of this or that there are proposals that we could not argue about individually; the big concern is that its parts may not add up to an adequate and consistent whole. That, I fear.

Earl Howe: My Lords, this has been a good debate. In the time available it is not possible to do more than skim the surface of some very important issues, although the noble Lord, Lord Turnberg, managed to do more than that. Most of us, I think, will have read the Government's White Paper with a mixture of relief, acceptance and questioning: relief, because of what it might have said, but did not, especially in relation to undergraduate medical education; acceptance, because on the whole it appears carefully thought through; and questioning, because of the detail around some of the proposals, which is quite simply absent.
	The really positive part of the White Paper is what it says about professionalism. Some feel that we are looking at the demise of professional self-regulation; I am not so gloomy. Certainly, with a 50:50 split of professional to lay members on the council, doctors will no longer hold sway over decision-making but, there again, nor will anyone else. As with so much in life, we are dealing here with public perceptions. That, I am afraid, is the answer to the BMA, which has questioned why members need to be appointed rather than elected and why it is necessary to have a separate adjudication body, given that already council members no longer sit on panels.
	It is rather like the situation regarding the Food Standards Agency 10 years ago. There was nothing at all wrong with how MAFF dealt with food safety, but public perceptions were otherwise, and in terms of commanding public confidence the FSA has largely been a success. Indeed, that is what we have to remember throughout this debate: the system of medical regulation, if it is to work, has to command the confidence not only of the profession but also of patients and the public. The key thing for the profession is that the GMC should be independent of government, be in charge of setting professional standards, and be in control of training. All those things are retained under these proposals. But we need to ask what is next.
	There is a whole lot here which is still a complete mystery. With revalidation, how on Earth can it be made to work fairly between different types of practitioner in different settings? How bureaucratic will it be? The concept of GMC affiliates is completely untried. We are looking at giving a lot of responsibility to single individuals; how can we make sure that the system is fair? The civil standard of proof and the sliding scale sound easy when they are explained, but how will that actually work in fitness to practise cases in a way that is just to patients and doctors and consistent between comparable cases? What appeal or redress will there be? These are some of the issues that will need working through in the next few months. I hope that the Minister can shed some light on them today.

Lord Hunt of Kings Heath: My Lords, this has been an excellent debate in which noble Lords have made some very telling points in a very limited time. I thank my noble friend Lord Turnberg and all other noble Lords who have spoken. I shall say more about how we intend to take the work forward, but this early opportunity for such an informed debate will be extremely valuable to me and my officials as we work through some of the details and answer some of the questions that noble Lords have raised tonight.
	I commend the noble Lord, Lord Turnberg, for what he said about the common desire to raise standards and quality. I welcome his support for aspects of the White Paper and entirely endorse his comments and those of my noble friend Lady Jones of Whitchurch about the trust of patients in doctors. The noble Baroness, Lady O'Neill, is in the Chamber, although she has not spoken. When it comes to trust I think that one could do no better than to read her marvellous Reith lectures in that area. I have always taken that as a central foundation in the approach that we should take to the regulation of professionals.
	We must also ensure, as the noble Earl, Lord Howe, said, that there is public confidence in the regulatory approach and the public can see that the regulatory approach is appropriate. The point that the noble Earl made about the Food Standards Agency is very telling; while there may be controversy about individual decisions made by the FSA from time to time, it has restored the public's confidence in the regulatory approach to food. That is surely what we seek to do in taking forward the White Paper proposals.
	I pay tribute to the current work of the regulatory bodies, on which my noble friend Lady Jones made some very important points. I am full of admiration for their work; I know the efforts that they put in to enhance credibility and the standard of their work and I pay tribute to the members of those regulatory bodies. I reiterate that point and respond particularly to the noble Earl, Lord Howe. I am very keen to ensure that healthcare professionals continue to be involved in professional regulation. I believe that over the past 100 to 150 years—and in the case of bodies such as the Royal College of Physicians and the Royal Colleges of surgeons, hundreds of years—they are the bodies that have been essentially responsible for upholding standards and enhancing the role of medical and health professionals.
	I assure noble Lords that I want those professionals to continue to have ownership of that regulation in partnership with those members of the public who represent the public interest. But it is vital that we have the highest calibre of health professionals around the table of health regulators in future. Since it is my responsibility to take forward the White Paper, I fully intend to make sure that that happens.
	I very much understand the comments of the noble Lord, Lord Walton, and my noble friend Lord Turnberg and their fears about over-regulation and bureaucracy. I, too, have read the report of the NHS Confederation and am ensuring that my officials work with that body so that we learn the lessons. I do not have time to talk about our more general proposals on regulation and pulling together some of the current regulators such as the Healthcare Commission and, in social care, the Mental Health Act Commission. I very much take the point that we must ensure that there is rigorous regulation for local NHS organisations which is not duplicated or overly bureaucratic. I am very much alive to the risks of bureaucracy in relation to the White Paper proposals; I shall want to prevent that. That is why the key reforms will be piloted in partnership with the professions and healthcare providers.
	We want to ensure that proportionate action does not hamper patient care with heavy-handed bureaucratic regulation. I say to my noble friend that the regional medical regulation support team is not a formal regulatory function or a new layer of bureaucracy; it is about bringing together key individuals in the region concerned with maintaining high professional standards. It means that medical directors facing difficult cases—some medical directors may not have much experience with very difficult cases—can draw on local expertise to advise them. That is far from being bureaucratic; we hope that it will aid the speedy resolution of such cases.
	The noble Baroness, Lady Murphy, mentioned the proportions "A third, a third, a third" in this context. That is a little harsh, although perhaps as politicians we would be prepared to accept that; I do not know. However, she is right: we want to get a balance between regulation, the development of the profession and standards. We want professional ownership in helping to develop those standards. That is what I want to see come out of this—the balance to which she referred.
	The noble Baroness, Lady Barker, referred to disparate provision. I do not recognise that. If she is referring to a system where there are more diverse providers, then I recognise what she is saying. I agree with her that as we devolve more and more responsibility to a local level, both in providing and commissioning services, regulation is the method by which you ensure the consistency that she asked for. That is achieved partly through the professions' individual regulatory bodies and partly through our proposals to have one regulator of services. I entirely agree with her about the end product of that regulatory action and that we need consistency of approach, not duplication and over bureaucracy. The noble Baroness raised the important issue of communication. She will know that in a few weeks' time a local government Bill will arrive in your Lordships' House. I understand that a number of noble Lords will take part in those discussions, which I very much welcome. She is right about communication. Dr Shipman was a much loved doctor, respected by his colleagues. Indeed, I believe that he was for some time secretary of the local medical committee. That shows some of the issues that have to be tackled. It is not just about the role of the GMC; it is about the role of a number of people and functions which we clearly need to improve. We will establish a national advisory group on regulation to help us tease out some of the answers to the questions noble Lords raised. It will be inclusive. I hope it will ensure that we get the proper balance that noble Lords require.
	I understand the seriousness of the points that the noble Baroness, Lady Emerton, and the noble Lord, Lord Turnberg, made on the standard of proof, but moving to the civil standard of proof for all regulated bodies will ensure the consistency of approach that is required. I know that my noble friend Lord Turnberg is concerned about the use of the term "flexibility", but the whole point about the civil standard of proof, which has worked perfectly satisfactorily in many cases, is that it can take account of the circumstances and gravity of individual cases. I am not aware that the regulatory bodies that use the civil standard have such problems. I suggest that there is an opportunity for all the regulatory bodies to come together to discuss this issue because there is current practice on the operation of the civil standard. Of course it must work fairly for professionals and patients. The noble Baroness, Lady Murphy, made very important points about the impact that the criminal standard has had on certain professionals who really ought not to be practising but, because of the standard of proof, have been allowed back into practice.
	The noble Lord, Lord Patel, emphasised safety. As chair of the NPSA, he is in a very good position to do so. He emphasised the importance of revalidation, which allows health professionals to demonstrate that they remain up to date and fit to practise. That must be right. I very much sympathise with the relevant and important comments of the noble Baroness, Lady Murphy, on medical students. I am learning a lot about medical training as I consider the joys of the NMC. I say to the noble Lord, Lord Patel, that we shall look at how NHS appraisal systems can be developed to provide the GMC with the information that it requires.
	My noble friend Lady Jones is right to say that the GMC has moved towards an internal separation of its investigation and adjudication functions. I pay tribute to the work that has been done and the impact it has had. But, rather as the noble Earl, Lord Howe, suggested, we feel that in order to meet some of the genuine criticisms that have been made, it is right that an independent body should adjudicate such matters. We are determined to follow that course.
	The noble Lord, Lord Patel, raised some very interesting points on the creation of GMC affiliates, which I will ensure officials consider. We see great potential in affiliates. They will ensure that doctors working for the GMC in every part of the country are available to ensure that patients' concerns are heard, investigated properly and tackled where necessary. For too long there has been a gap between what employers do locally to manage concerns about doctors and what the GMC can do nationally to address this. There is a great opportunity for early intervention. The benefit of early intervention is that in many cases problems can be nipped in the bud and dealt with rather than escalating and ending up at the GMC, perhaps many months later. Some cases ought to go to the GMC as quickly as possible but we know that in many cases the current system is simply too slow and inadequate to deal with problems when they first arise. Affiliates have a very important role to play.
	The noble Baroness, Lady Emerton, raised an important point about forthcoming elections to some of the regulatory bodies. I understand the point and am considering what ought to happen in that case. There has been a warm welcome regarding the future appointment of members. I very much endorse the comments of the noble Lord, Lord Walton, about the need for independence in that process. I have no doubt that it is right that we have an independent process. Equally, we have to ensure that only the highest calibre people, whether professionals or lay people, are appointed. It is essential that the people around those regulatory tables command absolute confidence among professionals and the public.
	I understand the issue that the noble Baroness, Lady Finlay, raised about recorded concerns. I should be very concerned about the practice of defensive medicine if what she mentioned were to happen, as clearly such practice is often not in the interests of the patients concerned. She has raised that point in previous debates on palliative care. I understand her points about fairness in the use of recorded concerns—getting the balance right between fairness to members of the public with legitimate concerns and fairness to the professional concerned. I shall ensure that her comments are fully considered in this work.
	The noble Lord, Lord Colwyn, suggested four principles of regulation, with which I very much agree, and said that he did not want to see it fragmented. I also agree with him on that, although the argument for the independence of adjudication is very well made. I very much endorse ensuring consistency not just within a regulatory body but between regulatory bodies. I take his point about the importance of language. Clearly, we have to consider the issues of self-employed people. I gently point out to noble Lords that we are governed by European legislation in this area. I will not pretend that this is easy, but I accept that it is a very important challenge, which we must face up to.
	I noted the comments about the Council for Healthcare Regulatory Excellence. It is appropriate for me to pay tribute to Jane Wesson, the chair of CHRE, who announced her resignation a few days ago. I do not want this to be a Big Brother agency; I do not want it to duplicate the work of the regulatory bodies. I want it to be there to provide strategic leadership and advice and to work well with the regulatory bodies.
	This has been an excellent debate, and I thank all noble Lords for their very important points. I have no doubt that we will have a further opportunity to debate the issues, and I assure noble Lords that their comments will be fully taken into account in this work.

Legal Services Bill [HL]

Further consideration of amendments on Report resumed.
	Clause 71 ["Licensable body"]:

Baroness Ashton of Upholland: moved Amendment No. 203:
	Clause 71, page 40, line 35, leave out "an individual who is"
	On Question, amendment agreed to.

Lord Hunt of Wirral: moved Amendment No. 204:
	Clause 71, page 40, line 38, at end insert—
	"( ) A body is not a "licensable body" if it is regulated under section 9(A) of the Administration of Justice Act 1985."

Lord Hunt of Wirral: My Lords, the purpose of the amendment is to enable legal disciplinary practices that have a substantial majority of lawyers but which do not have external ownership and provide only the services that an ordinary solicitors' firm can provide to be regulated under the Law Society's mainstream regulatory amendments.
	As the Minister will know well, I have on several occasions referred back to the excellent report by Sir David Clementi issued in December 2004. His review of the regulatory framework for legal services in England and Wales favoured a step-by-step approach, to which we have referred in previous debates. He ended up, in the final paragraph of his review—paragraph 104—by saying:
	"The proposal of this Review is that attention should focus on the setting up of a new regulatory system for lawyers with the LSB at its centre, and the authorisation of LDPs".
	He continued:
	"This would represent a major step towards MDPs, if at some subsequent juncture the regulatory authorities consider that sufficient safeguards could be put in place".
	That approach won the unanimous support of the Joint Committee, which I had the honour to chair. Legal disciplinary practices, as envisaged by Sir David Clementi, are practices that permit lawyers from different professional bodies to practise together as equals. He concluded in paragraph 1 that, so far as LDPs were concerned,
	"non-lawyers should be permitted to be Managers of such practices, subject to the principle that lawyers should be in a majority by number in the management group. The non-lawyers would be there to enhance the services of the law practice, not to provide other services to the public".
	The amendments in the group are designed to simplify the operation of legal disciplinary practices. That is the whole purpose behind Amendment No. 204. Noble Lords will see that Amendments Nos. 498, 501 and 505 are grouped with this amendment. Amendment No. 498 inserts the provision that,
	"at least three-quarters of the partners are authorised persons or are registered foreign lawyers".
	That is similar in terms to Amendments Nos. 501 and 505. Therefore, we very much follow Sir David Clementi's views.
	The amendments do not refer to multidisciplinary practices or to firms that have external ownership. We are just dealing with the idea that there could be a legal disciplinary practice. In fact, the Law Society has supported legal disciplinary practice for many years. It is known in its terminology as "legal practice plus". It is a means of ensuring that those who play a significant part in the running of a legal practice—for instance, a finance director—can be recognised with the status of a partner even if they are not a qualified lawyer.
	Noble Lords will be aware of my registration of interest, in that I am a partner in the national commercial law firm of Beachcroft LLP, and next year I will have been a partner in that firm for 40 years.

Baroness Ashton of Upholland: You can't be that old.

Lord Hunt of Wirral: My Lords, I hope that Hansard will record that comment.
	Throughout that time, I have been aware that the status of a partner in a solicitor's firm is something greatly to be envied by those who are not partners. It is a significant status symbol. It is tied up in the shadows of history that someone who is highly competent, who is an accountant and who is running the legal practice is not allowed to be a partner. Sir David Clementi saw that straightaway, and he thought, "Let us now recognise the status of these individuals as partners, even if they are not qualified lawyers". Under the provisions in the Bill—the Government are to be commended for this, although I did not vote in the last Division—there is certainly scope for trying to evolve a system that will work.
	It will now become possible for firms to make non-lawyers partners. But if that is to happen, suddenly the whole panoply of alternative business structures and their licensing regime comes into play. Therefore, the only way in which it will be possible for the finance director, or someone allied to that finance director, to become a partner is if the whole panoply, the separate ABS licensing regime, comes into force.
	I have contended on several occasions, as the Minister will know, that we should not really have this enormous unnecessary, administrative, regulatory burden coming into effect for legal disciplinary practices. I can just see what will happen. The finance director will become a partner; immediately the firm has to become an alternative business structure, and one day the finance director will leave and immediately the poor firm, if it then has a lawyer taking on that position, will cease to qualify as an alternative business structure, when all that will have happened is that the finance director has been replaced by someone who does not fulfil the requirements of the ABS.
	Sir David Clementi's analysis of the issues involved with the various forms of alternative business structures identified that significant additional considerations would arise with, for instance, external ownership. Also, if services were provided that could not be provided by an ordinary law firm, we would have to move step by step in the direction of alternative business structures. However, regarding LDPs that do not have external ownership, he made no sharp distinction between firms in which all the partners were qualified lawyers and firms in which a minority of the partners were non-lawyers.
	I quote again from Sir David's report. He said:
	"LDPs are law practices which permit lawyers from different professional bodies, for example solicitors and barristers, to work together on an equal footing to provide legal services to third parties. They may permit others (e.g. HR professionals, accountants) to be Managers, but these others are there to enhance the services of the law practice, not to provide other services to the public".
	Sir David did, however, argue that lawyers should be a majority by numbers on the management group. These amendments are designed to reinforce that by requiring at least three-quarters of the managers to be lawyers.
	In Committee, the Minister—and I have read and re-read her contribution—expressed concern that the non-lawyers would not be regulated and that that would create a risk to the public and to the public interest. That is emphatically not the intention, nor was it the intention of Sir David Clementi.
	Under the approach of these amendments, the Law Society would need power to establish a register of permitted non-lawyer partner-managers of firms and to set requirements for eligibility to the register. The requirements would be likely to include a character and suitability test, so that individuals who could not by virtue of previous convictions or other misconduct become solicitors would not be permitted to become non-lawyer partner-managers. There might also be a requirement to demonstrate familiarity with the Law Society's principles of professional conduct, since all managers of a firm share responsibility for ensuring that the firm complies with its regulatory responsibilities.
	I concede to the Minister that consequential amendments are likely to be needed to ensure that the Law Society has the necessary powers and to make it clear that partners or managers who are not authorised persons will be fully subject to the Law Society's regulatory regime, including prosecution before the Solicitors Disciplinary Tribunal.
	Finally, the Government have already said that LDPs will be able to operate very soon after Royal Assent. Under the Bill as currently drafted, that is only partly correct, because it will apply only to LDPs where the management group consists entirely of lawyers. These amendments would enable true LDPs, as envisaged by Sir David Clementi, to operate promptly.
	Lastly, I refer to the Joint Committee's recommendation that ABSs should be introduced on an incremental basis. That, in turn, maximises the likelihood that any unanticipated difficulties can be resolved well before the more challenging regulatory issue, such as that on externally owned law firms, needs to be tackled. I beg to move.

Baroness Ashton of Upholland: My Lords, perhaps I may make it absolutely clear at the outset that the comment that I made while the noble Lord was speaking was that he could not possibly be old enough to have been a partner for 40 years. Did the noble Lord say that? I do not accuse him of telling porkies, if I may use that terminology, but it is impossible.

Lord Kingsland: My Lords, he was a child prodigy.

Baroness Ashton of Upholland: My Lords, that is flattery of a particular kind.

Lord Carlile of Berriew: My Lords, that is the end of the flattery.

Baroness Ashton of Upholland: My Lords, exactly. As the noble Lord, Lord Carlile, said, that is the end of the flattery—but it was, none the less, heartfelt.
	The noble Lord, Lord Hunt, eloquently returned to an issue that we looked at in Committee. The question is the Law Society's ability to regulate practices with up to 25 per cent non-lawyer control without the need for those practices to be licensed under Part 5, and he has set out why he thinks that this is important. Amendments Nos. 311A, 311B, 311C and 632A, tabled with the support of the Institute of Chartered Accountants in England and Wales, would make similar provision for bodies with 25 per cent non-lawyer professionals, albeit that they would be low-risk bodies under the alternative business structure framework, rather than exempt from the framework.
	The amendments would also provide that firms with non-lawyer partners or members who do not provide services to clients should not require those licences. I hope that by this stage in our deliberations noble Lords will accept that I support the creation of practices that have non-lawyers as managers, or which combine the expertise of different professionals in the provision of services. I welcome very much both the Law Society and the Institute of Chartered Accountants facilitating and regulating such practices. I have said on many occasions that increased opportunities to leverage non-lawyer expertise into the legal services market is certain to create advantages both for consumers and for providers.
	What I cannot accept is exemption from Part 5 altogether for regulated practices within the proposed boundaries, which would go against a key principle of the Legal Services Bill and our proposals for alternative business structures. Our policy is to create, as far as is possible, a level playing field between regulators, offering all the potential to become licensing authorities. We could risk the opposite outcome. I know that that is not the intention of the noble Lord, but I do not wish to endorse a provision that gives one regulator a potential competitive advantage, first, by virtue of reaching part of the alternative business structure market before other regulators and, secondly, by avoiding the additional statutory requirements that would otherwise apply to these practices.
	I also do not want to endorse a proposal that gives a competitive advantage to non-lawyers who are regulated professionals, particularly given the concern that conflicts between professional rules may be one of the most complex challenges for those involved in alternative business structures. So I am opposed in principle to exemptions and carve-outs from the Part 5 regime. Certain forms of exemption may, arguably, facilitate an incremental approach in the short term; in the longer term, however, we run the risk of creating loopholes and possible confusion.
	We have tried in the Bill to make a clear, principled distinction between two types of practice. A body either has non-lawyers in positions of control or it does not. Consequently, it is either a licensable body or it is not. As I have stated, in the framework we have already provided for flexibility as far as low-risk bodies and other special bodies are concerned, but we have set 10 per cent as a maximum level on the basis that we think that control above that level becomes too significant to benefit from lesser scrutiny.
	In principle, the Government's policy is that bodies with non-lawyer ownership or management should be subject to the safeguards of Part 5. Therefore, if we were to make an exception for Law Society practices, such practices could emerge without any need for the Legal Services Board to designate the Law Society as a licensing authority. It would not be required to fulfil the relevant obligations. That is not to say that the Law Society would or could not create similar safeguards, but we would have no guarantees in statute. We would run the risk of exposing consumers to inconsistent levels of regulatory protection and we would not have, at least for several years, any board of supervision. I have similar objections to any exemption for bodies with non-lawyer partners, client-facing or otherwise.
	I hope that the noble Lords will agree that it is crucial that we get this right from the outset. The incremental approach suggested by the noble Lord, Lord Hunt of Wirral, would be of little value if it could not be monitored and supervised by the board and if it proceeded with none of the safeguards that we have identified as essential to support alternative business structures. With the greatest respect to the noble Lord, I do not think that what he suggests quite fulfils the objectives set out by Sir David Clementi.

Lord Hunt of Wirral: My Lords, on that point, the Government have said that legal disciplinary practices can come into place soon after Royal Assent. Perhaps the Minister could clarify exactly what the Government mean by that, because I do not think that the LDPs, as defined by Sir David Clementi—for example, where just one person, perhaps the finance or human resource director, is allowed to become part of the management structure and a partner in the firm—can happen until at least 2010, or even 2011. That point causes me some concern. Would the Minister be prepared to have a look at the sorts of examples that Sir David has given, just to ensure that we can have some fast-track procedure to allow that to happen without the great panoply and delay involved in awaiting the full structure?

Baroness Ashton of Upholland: My Lords, I could not agree more with the sentiment behind what the noble Lord is saying. It is important, not least in the debate on how alternative business structures will evolve and develop, to enable LDPs, as we have learnt to call them, to come into being as soon as possible. I need to get advice on the exact timetable as soon as possible to be sure about that, but I agree with the noble Lord wholeheartedly.
	I want to ensure that noble Lords recognise that I do not disagree with Sir David Clementi's judgment. He supported, as I do, the development of the types of practices that the Law Society is seeking to regulate, but he recommended that we put in safeguards around these practices. In particular, he talked about the head of legal practice and the fitness-to-own tests. He also recommended that those should be subject to oversight by the board under the B+ model.
	We believe that, in Part 5, we are guaranteeing that we have these safeguards in statute and that they can be relied on across the regulatory framework, while making it clear precisely to whom they should apply. Taking on board the noble Lord's point about wishing to move forward with this, which I endorse completely, I hope that he will feel able to withdraw his amendment.

Lord Hunt of Wirral: My Lords, this has been a very helpful debate, because I sense that the Minister and many of us are ad idem and want to achieve the same objective. I hope that, if there is time before the Third Reading, the Minister will look again at Sir David Clementi's report, as he spoke about the first step, which would facilitate the emergence of MDPs or alternative business structures at a subsequent date. I suppose that I am just talking about that first step, but, in the light of the comforting words that the Minister has uttered and the comments that she made at the outset of her speech, I shall be quixotically chivalrous and acknowledge how grateful I am to her for all that she has said tonight. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 205 not moved.]
	Clause 72 [Licensing authorities and relevant licensing authorities]:
	[Amendment No. 206 not moved.]
	Clause 73 [Designation of approved regulator as licensing authority]:
	[Amendment No. 207 not moved.]
	Clause 74 [Automatic cancellation of designation as licensing authority]:

Baroness Ashton of Upholland: moved Amendment No. 208:
	Clause 74, page 42, line 6, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.
	[Amendment No. 209 not moved.]
	Clause 75 [Cancellation of designation as licensing authority by order]:

Baroness Ashton of Upholland: moved Amendments Nos. 210 to 215:
	Clause 75, page 42, line 12, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 75, page 42, line 18, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 75, page 42, line 34, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 75, page 43, line 5, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 75, page 43, line 6, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 75, page 43, line 8, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	[Amendment No. 216 not moved.]
	Schedule 10 [Designation of approved regulators as licensing authorities]:

Baroness Ashton of Upholland: moved Amendments Nos. 217 to 232:
	Schedule 10, page 164, line 2, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 164, line 12, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 164, line 23, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 3, leave out "Secretary of State's" and insert "Lord Chancellor's"
	Schedule 10, page 168, line 10, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 15, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 22, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 23, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 27, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 30, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 31, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 34, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 39, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 168, line 42, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 169, line 2, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 10, page 172, line 28, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 76 [Cancellation of designation: further provision]:

Baroness Ashton of Upholland: moved Amendments Nos. 233 to 236:
	Clause 76, page 43, line 15, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 76, page 43, line 20, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 76, page 43, line 22, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 76, page 43, line 44, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	[Amendment No. 237 not moved.]
	Clause 77 [The Board's power to recommend orders made under section 76]:

Baroness Ashton of Upholland: moved Amendment No. 238:
	Clause 77, page 44, line 21, leave out "Secretary of State that the Secretary of State" and insert "Lord Chancellor that the Lord Chancellor"
	On Question, amendment agreed to.
	[Amendment No. 239 not moved.]
	Clause 78 [Cancellation of designation: powers of entry etc]:

Baroness Ashton of Upholland: moved Amendments Nos. 240 to 242:
	Clause 78, page 45, line 12, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 78, page 45, line 24, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 78, page 45, line 28, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	[Amendment No. 243 not moved.]
	Clause 79 [Functions of appellate bodies]:

Baroness Ashton of Upholland: moved Amendments Nos. 244 and 245:
	Clause 79, page 45, line 40, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 79, page 46, line 9, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	[Amendment No. 246 not moved.]
	Clause 80 [Procedural requirements relating to recommendations under section 79]:
	[Amendment No. 247 not moved.]

Baroness Ashton of Upholland: moved Amendment No. 248:
	After Clause 80, insert the following new Clause—
	"Licensing authority policy statement
	(1) Each licensing authority must prepare and issue a statement of policy as to how, in exercising its functions under this Part, it will comply with the requirements of section 27 (or, in the case of the Board, section 3) (duties to promote regulatory objectives etc).
	(2) A licensing authority may issue a statement under subsection (1) only with the approval of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator).
	(3) A licensing authority may, with the approval of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator), alter or replace a statement issued under this section.
	(4) If it does so, it must issue the altered or replacement statement.
	(5) In exercising its functions under this Part, a licensing authority must have regard to the statement issued by it under this section.
	(6) A licensing authority must publish a statement issued by it under this section."

Baroness Ashton of Upholland: My Lords, noble Lords will recall that there was considerable debate in Committee over licensing authorities' duties and whether and how we might reinforce them. There was also concern about the effects on access to justice of ABS firms, and what the licensing authorities should be obliged to do about it. I said then that the Government broadly agreed with noble Lords that improving access to justice was of course important.
	It is possible that some noble Lords believe that to impose a duty specifically about access to justice might be a more appropriate way to handle this, but we have sought to look at the interaction between access to justice and the other regulatory objectives in play. I make it clear that we do not wish to sideline access to justice issues. Licensing authorities will have to consider that interaction as part of their obligation, but we want them to do so in terms of and alongside its interaction with the other regulatory objectives; and to consider how they address it when considering applications for licences and special body modifications, the imposition of conditions and all other licensing functions. The fact that the duty does not single out access to justice means that authorities will have to consider the interaction of access to justice with other objectives, as I have indicated. The amendment also places policy statements, approval before their use and oversight of their use under the board's supervision. I beg to move.

Lord Kingsland: My Lords, the amendment runs into my own Amendment No. 252. I shall address my remarks specifically to this amendment, and hold my fire on the more general question for the later debate. However, I very much appreciate the fact that the Minister has tabled an amendment as a result of the discussions in Committee, which she rightly says were most constructive.
	The amendment requires licensing authorities to prepare statements of policy as to how they will comply with their obligation to promote the regulatory objectives when exercising their functions. However, this simply does not deal with the issue. It fails to direct licensing authorities' attention to the particular risks to access to justice posed by alternative business structures. The Bill provides comprehensive provision in the requirements of Schedule 13 about the ownership of licensed bodies to tackle the risk that persons who are not "fit and proper" might gain control over law firms. It is quite bizarre that the Bill should contain nothing to deal with the other main risk: that to access to justice posed by ABSs.

On Question, amendment agreed to.
	Clause 81 [Licensing rules]:

Baroness Ashton of Upholland: moved Amendment No. 249:
	Clause 81 , page 47, line 4, after "make" insert "suitable"

Baroness Ashton of Upholland: My Lords, in moving the amendment, I shall speak to Amendments Nos. 250, 251, 257 and 276. I am extremely grateful to the noble Lord, Lord Kingsland, for raising the point in Committee on 6 February about the role that the LSB would play as a licensing authority. I agreed to look at the drafting of Clause 81, and said that I would explore further possible amendments to emphasise the Government's policy intentions in this area more clearly.
	After further consideration, I concluded that the general obligation in Clause 81(1), which provides that the board is required to make licensing rules within 12 months of a date set by the Secretary of State—now the Lord Chancellor—should be amended, and that the board will have to make licensing rules only when there is evidence and a decision made under Schedule 12 that the board needs to act. That is when there is no other licensing authority with suitable arrangements in place for a particular type of body, or in the case of non-commercial bodies, there is no licensing authority able to offer appropriate terms.
	That approach reinforces the role that the Bill sets for the board as a licensing authority of last resort and avoids requiring the board to automatically make licensing rules. This would have required it to formulate different sets of licensing rules for categories of bodies that it may never have needed to license. The amendment provides that the board writes licensing rules only when there is a clear need for it to do so, which allows the board to focus on its primary role of oversight regulator during the crucial time of implementation, while assuring existing regulators that it will not be competing with them to formulate licensing rules.
	I am confident that this amendment reinforces our intention that the board should act only as a licensing authority as a last resort and should not compete with other approved regulators. Again, with grateful thanks to the noble Lord, Lord Kingsland, for raising the matter, I beg to move.

Lord Kingsland: My Lords, I rise simply to say that it gives me great pleasure to thank the noble Baroness for taking this initiative.

On Question, amendment agreed to.

Baroness Ashton of Upholland: moved Amendments Nos. 250 to 251:
	Clause 81 , page 47, line 5, leave out from "day" to end of line 6 and insert "on which a licensable body first becomes entitled to make an application to it for a licence by virtue of a decision of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator) under Schedule 12;"
	Clause 81 , page 47, line 9, at end insert—
	"( ) In subsection (1)(a), "suitable licensing rules" means licensing rules which constitute suitable regulatory arrangements (within the meaning of Schedule 12) in respect of licensable bodies entitled by virtue of a decision under that Schedule to make an application to the Board for a licence."
	On Question, amendments agreed to.

Lord Kingsland: moved Amendment No. 252:
	Clause 81 , page 47, line 25, at end insert—
	"( ) appropriate provision requiring the licensing authority to consider the likely impact of a proposed application on access to justice when determining the application,"

Lord Kingsland: My Lords, we had a good debate on this amendment in Committee. Since then we have given the matter further thought and tabled Amendments Nos. 253 and 254 in addition to Amendment No. 252. All these amendments would require that the impact on access to justice is fully considered when decisions on licensing prospective alternative business structures are taken.
	For all the benefits of the new regime, the Government cannot hide from the fact that there are clear risks that external ownership of law firms by bodies such as supermarkets or insurance companies could harm access to justice. It is evident that some of the less attractive legal services could get left behind and, as the Joint Committee noted, the new rules could well reduce the geographical availability of legal services. It is essential that the potential impact on access to justice, particularly in rural areas, is taken into account before any licensing decisions which could do permanent damage are taken.
	That point is worthy of development, but I do not need to do so on this occasion because your Lordships had the benefit of the trenchant and forthright views of the noble Lord, Lord Carlile of Berriew, on these dangers, which were expressed, too, in the debate that flowed from his introduction.
	I have already thanked the noble Baroness for tabling her Amendment No. 248, but she will have concluded from what I said that we do not believe that the Government's amendment to require licensing authorities to prepare statements of policy is sufficient. It fails to point authorities explicitly to the particular risks to access to justice posed by alternative business structures.
	I recall that, in Committee, the noble Baroness was concerned that,
	"there may be unintended problems if we say access to justice is the overarching objective".—[Official Report, 6/2/07; col. 634.]
	However, Amendment No. 252 does not intend to create such an overarching objective. It is merely intended to ensure that the licensing authorities consider the possible effect of access to justice and give the issue full weight when determining applications. It would be desirable for licensing rules to contain provisions requiring consideration of the impact of access to justice on a continuing basis; that is to say, in renewal decisions as well.
	We on these Benches still prefer our original amendment in Committee, which is now Amendment No. 252, but our new wording in Amendments Nos. 253 and 254 is designed to allay the Government's fears that the change might require access to justice considerations automatically to trump all other regulatory objectives. These amendments also highlight that the particular concern is for comparatively disadvantaged consumers, whose circumstances require particular protection. These amendments are absolutely essential to ensure that Part 5 of the Bill will operate in the public interest. I beg to move.

Lord Carlile of Berriew: My Lords, given my comments on Amendment No. 202, it will be no surprise to the House to know that I support these amendments. We regard specificity about access to justice as essential as we fear that otherwise there will be a real diminution of access to quality justice in Wales, the West Country and parts of the north-east and north-west, a reduction in the number of firms of solicitors and a risk of law by call centre. We support these amendments.

Baroness Butler-Sloss: My Lords, I support what the noble Lord, Lord Carlile, said, particularly with regard to the west of England, where I live for part of the year. It is important that one recognises that the noble Lord, Lord Whitty, who undoubtedly supports a large proportion of consumers, does not support all consumers. There are small consumers who have real needs. Whether it is to be seen under Amendment No. 252, 253 or 254, there are small people who need help from local firms of solicitors and those local firms may not survive this grand new scheme that the Government have produced. I am speaking on behalf of some rural communities, but it is equally appropriate to speak on behalf of small areas on the outskirts of big cities. One has to say that what is suggested in Amendments Nos. 252 to 254 has real merit. They should be seriously considered by the Government. I support the amendment moved by the noble Lord, Lord Kingsland.

Baroness Ashton of Upholland: My Lords, I start by saying that I could not agree more on the importance of access to justice; it is vital. I have approached it by seeking to recognise that when licensing authorities are operating they must balance access to justice correctly against other objectives and ensure that it is achieved. In that respect there is nothing between us.
	I have sought to put access to justice in the context of enabling it to be balanced so that it can be achieved taking into account the other regulatory objectives. The interaction of those objectives is important. I appreciate what the noble Lord, Lord Kingsland, said about Amendment No. 248, but I want that to be seen as reinforcing that as effectively as possible. We must make sure that we not only get a balance but also that the other objectives are not lost or forgotten, or, indeed, that the holistic approach of the regulatory objectives, working together, means access to justice is suitably protected.
	What I am trying to demonstrate is that we have taken all the regulatory objectives and said, "These are critical"; access to justice certainly is. But all of them need to be considered effectively and properly. That is my difficulty with Amendment No. 252. I do not in any way differ from the requirement about access to justice issues—the noble and learned Baroness indicated that in the examples she gave; the noble Lord, Lord Carlile, gave examples in the context of the Part 5. We must make certain that access to justice is protected. But I want it to be done with the other objectives. All I am saying is that they are all important; they all have to be dealt with properly; and they all have to be, within the context of the amendments I am moving, seen to be important—an issue we will come on to in terms of reporting and so on. It does not mean that I am in any way suggesting that access to justice is less than very important; I am simply saying that actually all the objectives are and that it needs to be considered as critical alongside the other objectives.
	I have problems with two of the amendments within the group. Amendment No. 253 in a sense seeks to give priority to access to justice by imposing a requirement that it is not quite the same as a regulatory objective. There is a risk in that. A similar obligation that is not quite the same could cast doubt on what we mean by access to justice, and I do not want anything in the legislation that could create confusion about how you interpret the objectives and over what the licensing authorities' duties are.
	Amendment No. 254 has the list of groups of consumers. Noble Lords will know—I indicated this in Committee—from my previous existence in education and all the way through my existence as a DCA Minister that I really do not like lists in legislation. The use of different phrases can cause confusion. If we single out four groups of consumers we fail to recognise other consumer interests as well. We have had much debate, as I have already indicated, about the effect of alternative business structures on rural communities and those who are poor and their use of legal services. I absolutely agree that they must not be disadvantaged. Equally, I do not want other consumers to be disadvantaged. Everyone's access to justice is important. The general duty to consider the interests of all consumers avoids trying to put some consumer interests behind the interests of other people. I think that that can be achieved without Amendment No. 254.
	As I tried to indicate in debate on Amendment No. 248, we need to make sure that the regulatory objectives are protected. Access to justice is very important. I do not think that the amendments before us make the position any better and they risk creating problems I would rather see avoided. But I support the contention of making sure that access to justice is very important and hope that the noble Lord will withdraw the amendment.

Lord Kingsland: My Lords, I am most grateful, as always, for the intervention of the noble Baroness, but I am in some difficulty about it. The noble Baroness seems extremely keen to protect the integrity of the eight objectives and not to favour any one in the Bill but at the same time supports the intention that lies behind our amendments. It is plain that the intention behind our amendments is to pick out one of the eight objectives and invite the Government to give it significant weight in the Bill.
	Let me draw a parallel from an unlikely source. In the law of town and country planning, it is traditional for legislation not to interfere with the discretion of the inspector in applying weight to all the relevant factors that he must consider. However, recently, in the context of wind farm proposals, the Government have broken with that tradition. Government policy on wind farm development means that the inspector now must give significant weight to the environmental advantages of the building of wind farms. One consequence of that is that an awful lot of wind farms are being built. So there is a clear precedent for the Government breaking ranks with what I accept as having been a tradition of public authorities exercising discretionary powers. I simply do not understand how, on the one hand, one can meet the problem that, the Government accept, is posed by Part 5 and, at the same time, not confront it in the Bill.
	I shall not press the noble Baroness on this tonight, but I hope that she will think about the issue again. She must be in no doubt that, on Third Reading, we will come back to the issue in the hope that she will come back to us, too, so that there is a pleasing meeting of minds. If not, I find it difficult to see what we can do other than seek the opinion of the House. I shall be sad to do that, because I felt that this was one of the few areas in the Bill where we had been building consensus, but the crucial component of the consensus is that, in some way or other, access to justice must have an enhanced value in this part.
	I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 253 to 255 not moved.]
	Schedule 11 [Licensing rules]:

Baroness Ashton of Upholland: moved Amendments Nos. 256 to 273:
	Schedule 11 , page 173, line 7, after "fee" insert "(if any)"
	Schedule 11 , page 173, line 21, at end insert "in accordance with its licensing rules"
	Schedule 11 , page 174, line 6, after "fee" insert "(if any)"
	Schedule 11 , page 174, line 23, after "fee" insert "(if any)"
	Schedule 11 , page 174, line 34, after "fee" insert "(if any)"
	Schedule 11 , page 175, line 19, leave out "an individual" and insert "a person (other than a licensed body)"
	Schedule 11 , page 176, line 9, leave out "about"
	Schedule 11 , page 176, line 10, at beginning insert "about"
	Schedule 11 , page 176, line 12, at end insert—
	"( ) for a review by the licensing authority of a determination under that paragraph that an individual is not a fit and proper person;"
	Schedule 11 , page 176, line 13, at beginning insert "about"
	Schedule 11 , page 176, line 15, at end insert—
	"( ) for a review by the licensing authority of a determination under that paragraph to withdraw its approval;"
	Schedule 11 , page 176, line 16, at beginning insert "about"
	Schedule 11 , page 176, line 41, leave out "about"
	Schedule 11 , page 176, line 42, at beginning insert "about"
	Schedule 11 , page 176, line 44, at end insert—
	"( ) for a review by the licensing authority of a determination under that paragraph that an individual is not a fit and proper person;"
	Schedule 11 , page 177, line 1, at beginning insert "about"
	Schedule 11 , page 177, line 3, at end insert—
	"( ) for a review by the licensing authority of a determination under that paragraph to withdraw its approval;"
	Schedule 11 , page 177, line 4, at beginning insert "about"
	On Question, amendments agreed to.
	Clause 82 [Application for licence]:

Baroness Ashton of Upholland: moved Amendment No. 274:
	Clause 82 , page 48, line 19, at end insert "(if any)"
	On Question, amendment agreed to.
	[Amendment No. 275 not moved.]
	Schedule 12 [Entitlement to make an application for a licence to the Board]:

Lord Evans of Temple Guiting: moved Amendments Nos. 276 to 278:
	Schedule 12 , page 181, line 9, at end insert ", having regard to the matters in section 104(5)(a) to (c) and any other matter specified in rules made by the Board for the purposes of this sub-paragraph."
	Schedule 12 , page 182, line 34, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 12 , page 182, line 39, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 83 [Terms of licence]:
	[Amendment No. 279 not moved.]
	Clause 84 [Modification of licence]:
	[Amendment No. 280 not moved.]
	Clause 85 [Registers of licensed bodies]:
	[Amendment No. 281 not moved.]
	Clause 86 [Evidence of status]:
	[Amendment No. 282 not moved.]
	Clause 87 [Ownership of licensed bodies]:
	[Amendment No. 283 not moved.]
	Schedule 13 [Ownership of licensed bodies]:

Lord Evans of Temple Guiting: moved Amendments Nos. 284 to 290:
	Schedule 13 , page 187, line 14, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 13 , page 187, line 35, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 13 , page 188, line 10, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 13 , page 191, line 21, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 13 , page 192, line 3, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 13 , page 198, line 30, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 13 , page 199, line 3, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	Clause 88 [Duties of non-authorised persons]:
	[Amendment No. 291 not moved.]
	Clause 89 [Duties of Head of Legal Practice]:
	[Amendment No. 292 not moved.]
	Clause 90 [Duties of Head of Finance and Administration]:
	[Amendment No. 293 not moved.]
	Clause 91 [Information]:
	[Amendment No. 294 not moved.]
	Clause 92 [Enforcement of notices under section 91]:
	[Amendment No. 295 not moved.]
	Clause 93 [Financial penalties]:

Lord Evans of Temple Guiting: moved Amendment No. 296:
	Clause 93 , page 52, line 17, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.
	[Amendment No. 297 not moved.]
	Clause 94 [Appeals against financial penalties]:
	[Amendment No. 298 not moved.]
	Clause 95 [Recovery of financial penalties]:
	[Amendment No. 299 not moved.]
	Clause 96 [Referral of employees etc to appropriate regulator]:
	[Amendment No. 300 not moved.]
	Clause 97 [Disqualification]:
	[Amendment No. 301 not moved.]
	Clause 98 [Lists of disqualified persons]:
	[Amendment No. 302 not moved.]
	Clause 99 [Suspension and revocation of licence]:
	[Amendment No. 303 not moved.]
	Clause 100 [Intervention]:
	[Amendment No. 304 not moved.]
	Schedule 14 [Licensing authority's powers of intervention]:

Lord Evans of Temple Guiting: moved Amendment No. 305:
	Schedule 14 , page 207, line 36, after "authority" insert ", having taken such steps to do so as are reasonable in all the circumstances of the case,"
	On Question, amendment agreed to.
	Clause 101 [Regulatory conduct and the Board as licensing authority]:
	[Amendment No. 306 not moved.]
	Clause 102 [Prevention of regulatory conflict: accounts rules]:
	[Amendment No. 307 not moved.]
	Clause 103 [Trade union exemptions]:
	[Amendment No. 308 not moved.]
	Clause 104 [Power to modify application of licensing rules etc to special bodies]:

Lord Evans of Temple Guiting: moved Amendment No. 309:
	Clause 104 , page 56, line 15, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.
	[Amendment No. 310 not moved.]
	Clause 105 [Modifications under section 104: supplementary]:
	[Amendment No. 311 not moved.]
	Clause 106 ["Low risk body"]:
	[Amendments Nos. 311A, 311B, 311C and 312 not moved.]
	Clause 107 [Foreign bodies]:

Lord Evans of Temple Guiting: moved Amendment No. 313:
	Clause 107, page 58, line 17, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.

Lord Evans of Temple Guiting: moved Amendment No. 314:
	Clause 107, page 58, line 19, leave out "the United Kingdom" and insert "England and Wales"
	On Question, amendment agreed to.
	[Amendment No. 315 not moved.]

Lord Hunt of Wirral: moved Amendment No. 316:
	After Clause 107, insert the following new Clause—
	"Monitoring and research
	(1) The Lord Chancellor shall, in accordance with the provisions of this section, provide for the carrying out of a study into the operation of this Part.
	(2) The Lord Chancellor shall make such preparations for the study to begin as soon as regulations bringing this Part into force are produced, and such preparations may relate to the instruction of a research team and formation of a Research Advisor Group to assist in the direction of the study.
	(3) Within three years of the date on which this Part comes into force, the Lord Chancellor shall lay before Parliament a report on the results of the study."

Lord Hunt of Wirral: My Lords, I am very grateful to the Ministers for sharing their thoughts behind Amendment No. 317. It might be convenient for the House if we considered Amendments Nos. 316 and 317 together, because undoubtedly the noble Lord, Lord Evans of Temple Guiting, sees Amendment No. 317 as a better alternative to Amendment No. 316. I concede that Amendment No. 317 sets it out clearly that the board's annual report will have to deal with the activities of licensing authorities and licensed bodies and the way in which those activities have affected the regulatory objectives. It applies, of course, not to the first annual report but to subsequent reports.
	The noble Lord, Lord Evans of Temple Guiting, may recall that I gave an example in Committee of the whole procedure of personal injury compensation to which the noble Lord, Lord Carlile of Berriew, referred. The Government introduced the conditional fee agreements, which became known as "no win, no fee", against a background of no real research. It soon became clear that things were beginning to go wrong. We saw that with the television advertisements that suggested, "Where there is blame, there is a claim, and it will not cost you a penny", and with the rise of Claims Direct, the Accident Group and Tag. I told the previous Lord Chancellor, the noble and learned Lord, Lord Irvine of Lairg, on several occasions that some careful studies should have been made before the step into the unknown was taken. I understood at the time that it was because of Treasury pressure on budgets. The budget was no longer there, so civil legal aid had to be dramatically cut, and the subsequently named Department for Constitutional Affairs thought that "no win, no fee" agreements were the only way forward.
	I give that as an example because it is very similar to the situation now. The whole procedure involved in setting into being this new structure is, to some extent, a step into the unknown. I well understand the noble Lord, Lord Carlile, saying that we should take it all out of the Bill, because there is no doubt that there are fears and concerns about what this new system will do, particularly in certain respects.
	My argument, however, is linked much more to Sir David Clementi's report, because the review set out a procedure that envisaged a step-by-step approach towards LDPs, and rather rejected the idea of multi-disciplinary practices as a necessary concomitant, further progression of the notion of these new structures. We are therefore going between Sir David Clementi and the unknown, and we do not know what will happen. This is why the noble and learned Lord the Lord Chancellor, who is introducing this policy, rather than the board should make preparations for the study to be commenced as soon as regulations bringing this part into force are produced. Then let us have a proper debate about it before we move to the next stage.
	I realise that this falls foul of the Government's intention to move with one bound to free the structures in a dramatic way. Their alternative may deal with the problem in subsequent years, but I would like at the outset to have a careful study into what will happen. I beg to move.

Lord Evans of Temple Guiting: My Lords, we listened very carefully to what was said in Committee. In our amendment, we thought not only that we had encapsulated the spirit of what was said but that our amendment had gone a little further. I have listened carefully to the noble Lord, Lord Hunt, but I am not sure whether he likes the government amendment or feels that it does not go far enough. Therefore, I will present the government amendment and, if there are further things to think about before Third Reading, we will be more than happy to consider them.
	When we debated Amendment No. 248, my noble friend said that the Government had tabled an amendment of their own about monitoring ABS. We have come to the conclusion that we should place the board under a specific duty to report on the development of ABS. This amendment fulfils the commitment we gave in Committee. It integrates reporting into the board's annual report. The board will have a permanent duty to include ABS. The report is, of course, laid before Parliament, so this will reinforce parliamentary scrutiny of ABS as provided for in Amendment No. 248. Placing the monitoring duty on the board keeps all oversight of ABS in one place, which gives a more joined-up approach to checking how the regulatory objectives are being met. The reporting duty covers licensing authorities and licensed bodies. This means that the board will be monitoring not only the decisions of licensing authorities, which it would anyway in its oversight role, but also the practical effects of those decisions.
	Amendment No. 317 places responsibility for monitoring and reporting on the board rather than on the Lord Chancellor, a point with which the noble Lord, Lord Hunt, disagrees, or on a separate research body, as in Amendment No. 316. This ensures that all oversight responsibilities are kept in one place and thus guarantees a consistent approach. The reporting duty is focused. It is not merely about the development of ABS, but specifically about the effects of ABS activity on the regulatory objectives. This allows all the objectives to be considered, including, of course, access to justice. But it remains consistent with Amendment No. 248 in that it does not single out any one objective. As my noble friend pointed out, all the objectives need to be considered together to capture the interactions between them. This amendment carries that through into reporting on Part 5.
	I am grateful to the noble Lords, Lord Kingsland and Lord Hunt, for raising this point in Committee. I hope that our amendment slightly improves on that tabled by the noble Lord, Lord Hunt, although that may be a rather arrogant statement. Rather than being covered after a fixed period, Part 5 will always feature in the board's report. The board will be able to report on initial steps and will continue to report as ABS develops and reaches a steady state. Of course, the board, Ministers and Parliament will all remain free to recommend change if reports or events reveal that it is necessary.
	Before I formally move our amendment, I wish to repeat that we would be very happy to discuss with the noble Lord, Lord Hunt, any improvement he feels that we may achieve to this government amendment before Third Reading.

Lord Hunt of Wirral: My Lords, I am much persuaded by the noble Lord, and his offer to improve government Amendment No. 317 is readily accepted. But having listened to his detailed explanation, I am now absolutely convinced that these two amendments stand side by side, Amendment No. 316 to cover the immediate position and Amendment No. 317 to provide a way into the future whereby the study under Amendment No. 316 can be followed up time and again through the mechanism of the annual report. I am grateful to the Minister, but I am still persuaded that Amendment No. 316 can sit alongside Amendment No. 317, so I would like to test the opinion of the House.

On Question, Whether the said amendment (No. 316) shall be agreed to?
	Their Lordships divided: Contents, 36; Not-Contents, 38.

Resolved in the negative, and amendment disagreed to accordingly.

Baroness Ashton of Upholland: moved Amendment No. 317:
	Before Clause 108 , insert the following new Clause—
	"Reporting requirements relating to Part 5
	(1) The Board's annual report must deal with how, in the Board's opinion, the activities of licensing authorities and licensed bodies have affected the regulatory objectives.
	(2) This section does not apply to an annual report for a financial year before the first financial year in which a licence is issued under this Part.
	(3) In this section "annual report" and "financial year" have the same meaning as in section 6."
	On Question, amendment agreed to.
	Clause 108 [Interpretation of Part 5]:

Baroness Ashton of Upholland: moved Amendments Nos. 318 and 319:
	Clause 108 , page 58, line 28, leave out from "not" to end of line 31 and insert "within subsection (2);"
	Clause 108 , page 58, line 37, at end insert—
	"(2) The following persons are within this subsection—
	(a) an authorised person in relation to an activity which constitutes a reserved legal activity, (b) a registered foreign lawyer (within the meaning of section 89 of the Courts and Legal Services Act 1990 (c. 41)), (c) a person entitled to pursue professional activities under a professional title to which the Directive applies in a state to which the Directive applies (other than the title of barrister or solicitor in England and Wales), (d) a body which provides professional services such as are provided by persons within paragraph (a) or lawyers of other jurisdictions, and all the managers of which and all the persons with an interest in shares in which— (i) are within paragraphs (a) to (c), or (ii) are within this paragraph by virtue of sub-paragraph (i).
	(3) In subsection (2)(c) "the Directive" means Directive 98/5/EC of the European Parliament and the Council, to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained."
	On Question, amendments agreed to.
	[Amendment No. 320 not moved.]
	Schedule 15 [The Office for Legal Complaints]:

Baroness Ashton of Upholland: moved Amendment No. 321:
	Schedule 15 , page 212, line 13, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.

Lord Kingsland: moved Amendment No. 322:
	Schedule 15 , page 212, line 16, leave out sub-paragraph (2)

Lord Kingsland: My Lords, I shall speak to Amendment No. 325 as well. Both amendments address the relationship between the Lord Chancellor and the Office for Legal Complaints. They were debated at some length on 21 February, as reported at columns 1088 to 1094 of Hansard. Your Lordships will be relieved to hear that I have no intention of rehearsing the arguments advanced at that time. I will simply summarise our submissions on the matter.
	Amendment No. 322 would take away from the noble and learned Lord the Lord Chancellor the power to alter the number of members of the Office for Legal Complaints. We do not agree with the Minister's analysis in Committee when she said:
	"The Secretary of State ... is best placed to do that".—[Official Report, 21 February 2007; col. 1090.]
	This function should really be undertaken by the board. The Office for Legal Complaints is directly answerable to the board, not to the noble and learned Lord.
	The vote on Monday, protecting the independence of the board, adds a great deal of weight to my case. It should be an independent board that takes administrative decisions over the Office for Legal Complaints. I agree with the analysis in Committee of my noble and learned friend Lord Lyell of Markyate that the principle raised by Amendment No. 325, which relates to the removal of the chairman of the Office for Legal Complaints, is, if anything, the more fundamental of the two in this group.
	Both amendments would reduce the Lord Chancellor's inappropriate influence over the Office for Legal Complaints in the Bill. As I indicated in Committee, if the noble and learned Lord the Lord Chancellor were to disagree with the Legal Services Board on either the chairmanship or the number of members of the Office for Legal Complaints, it would be appropriate for him to take up the issue with the board, not to have the power to act on his own behalf. I beg to move.

Baroness Ashton of Upholland: My Lords, I am concerned that the amendments stem from a worry that the Lord Chancellor would have undue influence over the Office for Legal Complaints and I genuinely do not believe that that is the case. The role of the Lord Chancellor in setting the size of the board or in consenting to the removal of the chairman of the OLC is non-interventionist. He will not change the size of the OLC of his own volition nor can he remove the chairman of the OLC. The OLC is a non-departmental body and as such is ultimately accountable to Parliament. It therefore must be right that the Lord Chancellor have the minimum of involvement in how the OLC is constituted. But when I say "minimum", I mean exactly that. The Lord Chancellor has no role in approving any of the rules that the OLC makes in setting out how complaints can be handled, with only one exception: the rules on case-handling fees. He certainly has no role in appointing ombudsmen to determine complaints or in handling individual complaints. Therefore, any concern that he would have undue influence over the OLC is not substantiated. I hope that the noble Lord will withdraw the amendment.

Lord Kingsland: My Lords, I am most grateful to the Minister. I am quite sure that the noble and learned Lord would not exercise his discretionary power in a prejudicial way. My concern is about the structure of the relationship between the board and the OLC. The OLC is subject to the board's jurisdiction. The right person to take decisions about the size of the OLC and its composition is surely the Legal Services Board, not the noble and learned Lord. That is the purpose of these amendments. I have listened very carefully to the Minister's reply; there is no meeting of minds on this matter therefore I wish to ask the opinion of the House.

On Question, Whether the said amendment (No. 322) shall be agreed to?
	Their Lordships divided: Contents, 33; Not-Contents, 40.

Resolved in the negative, and amendment disagreed to accordingly.

Baroness Ashton of Upholland: moved Amendments Nos. 323 and 324:
	Schedule 15 , page 212, line 16, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 15 , page 214, line 2, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.
	[Amendment No. 325 not moved.]

Baroness Ashton of Upholland: moved Amendments Nos. 326 to 330:
	Schedule 15 , page 216, line 5, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 15 , page 216, line 15, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 15 , page 216, line 22, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 15 , page 216, line 34, leave out "Secretary of State" and insert "Lord Chancellor"
	Schedule 15 , page 216, line 39, leave out paragraph (b) and insert—
	"(b) give a copy of the Comptroller and Auditor General's report to the Lord Chancellor.
	(5A) In respect of each financial year, the Lord Chancellor must lay before Parliament a document consisting of—
	(a) a copy of the statement of accounts for that year, and (b) a copy of the Comptroller and Auditor General's report on that statement."
	On Question, amendments agreed to.
	Clause 113 [General obligations]:

Baroness Ashton of Upholland: moved Amendment No. 331:
	Clause 113 , page 60, line 31, leave out from "schemes," to end of line 32
	On Question, amendment agreed to.
	Clause 115 [Annual report]:

Baroness Ashton of Upholland: moved Amendments Nos. 332 and 333:
	Clause 115 , page 61, line 12, leave out "Secretary of State" and insert "Lord Chancellor"
	Clause 115 , page 61, line 13, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendments agreed to.

Lord Evans of Temple Guiting: My Lords, I beg to move that further consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.

Climate Change Bill: Joint Committee

A message was brought from the Commons that they concur with the Lords message of 27 March that it is expedient that a Joint Committee of Lords and Commons be appointed to consider and report on the draft Climate Change Bill presented to both Houses on 13 March 2007, that the Committee should report on the draft Bill by 13 July 2007 and that they have ordered:
	That a Select Committee of 12 Members be appointed to join with the committee appointed by the Lords to consider the draft Climate Change Bill;
	That the committee shall have power:
	(i) to send for persons, papers and records;
	(ii) to sit notwithstanding any adjournment of the House;
	(iii) to report from time to time;
	(iv) to appoint specialist advisers; and
	(v) to adjourn from place to place within the United Kingdom.
	House adjourned at 9.49 pm.